UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. )
 | Filed by the Registrant |  | Filed by a |
| Preliminary Proxy Statement | |
| Confidential, for | |
| Definitive Proxy Statement | |
| Definitive Additional Materials | |
| Soliciting Material | |
Occidental Petroleum Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| No fee | |
| Fee paid previously with preliminary materials | |
| ☐ | Fee computed on table | |
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Occidental Petroleum Corporation FPO 2018 Proxy Statement NoticeTable of Annual Meeting of Stockholders Annual Meeting | Friday, May 4, 2018 Occidental Petroleum Conference Center | 5 Greenway Plaza, Houston, Texas
Contents
| Message from the Board of Directors |
Dear Shareholders,
DEAR STOCKHOLDERS,
On behalf of the Board of Directors, we are pleased toWe cordially invite you to attend Occidental’s 20182022 Annual Meeting of Stockholders, whichShareholders (2022 Annual Meeting). The meeting will be held at the Occidental Petroleum Conference Center, 5 Greenway Plaza, Houston, Texas 77046,via live webcast on Friday, May 4, 2018,6, 2022 at 9:00 a.m. The meeting will include a report on operations and an opportunity for you to ask questions.
2017 was a year of performance, innovation and growth for Occidental. We finished the year with the highest-quality portfolio of assets in the company’s nearly 100-year history and continued to deliver on our value proposition of dividend and moderate production growth. We also implemented a strategic cash flow breakeven plan, positioning our company for sustained annual production growth in a lower price environment.
As part of our commitment to strong corporate governance practices, our senior management and Board continued to engage with Occidental’s stockholders and other stakeholders. This past fall, Occidental met with a broad range of investors and other stakeholders to discuss our long-term value proposition; environmental, social and governance issues; the executive compensation program; and matters related to board composition. Several of our independent directors participated in many of these engagements. These meetings were helpful in shaping our 2018 report, “Climate-Related Risks and Opportunities: Positioning for a Lower-Carbon Economy,” which is available for download at www.oxy.com/SocialResponsibility. More information regarding the report and other outcomes of our recent engagement efforts are detailed in this proxy statement.
Central Time. A meeting agenda and details follow, as well as voting instructions. We encourage youYou will be able to participate in the 2022 Annual Meeting online at www.virtualshareholdermeeting.com/OXY2022 and may submit questions and vote your shares promptly,electronically (other than shares held through our employee benefit plans, which must be voted prior to the meeting). The attached Notice of the 2022 Annual Meeting of Shareholders and thank youproxy statement provide details on how to join the meeting and the business we plan to conduct.
Over the past two years, Occidental has continued to deliver for our shareholders and other stakeholders, including customers, employees and the communities in which we operate, while navigating the ongoing COVID-19 pandemic and volatile market conditions. We are incredibly proud of senior management for their swift efforts to implement proactive measures to reduce the risk of transmission across the company’s domestic and international operations and navigate this period of significant change, and even more impressed by the way in which our employees have responded, adapted and persevered. Reflecting our culture of collaboration and innovation, our employees identified new efficiency improvements, implemented change where necessary and enhanced the company’s operational performance, with multiple drilling and completion records.
These operational successes drove the company’s financial success in 2021. Occidental generated operating cash flow from continuing operations of $10.3 billion and record free cash flow of $8.8 billion(1) for the year. Occidental also delivered on near-term cash flow priorities. Throughout 2021, Occidental made significant progress in de-risking and strengthening the company’s balance sheet, including repaying approximately $6.7 billion of debt and retiring $750 million of notional interest rate swaps. With this backdrop, in February 2022, the Board approved a regular quarterly common dividend of $0.13 per share and a $3 billion share repurchase program as part of the company’s new shareholder return framework. We appreciate your continuedinvestment in Occidental and believe that the company’s operational excellence, asset portfolio and commitment to returning capital to shareholders, among other things, will position us to continue to deliver value.
Climate: As the first U.S. oil and gas company to establish net-zero goals for our total carbon inventory of Scope 1, 2 and 3 emissions, Occidental continues to be committed to leveraging our expertise in carbon management and storage to advance a low-carbon future. Through our net-zero strategy, which is discussed in more detail in the “Corporate Governance” section under “Sustainability,” we are focused on meeting society’s needs for energy and essential products while mitigating our greenhouse gas (GHG) emissions and helping others do the same. A few actions in support of Occidental.our commitment include:
| ► | We established additional quantitative short- and medium-term targets for Occidental’s Scope 1, 2 and 3 emissions that we believe align with the goals of the Paris Agreement and support Occidental on our path to achieving net zero. On the ground, our operations teams continued to implement new facility designs, retrofitting of existing equipment, energy efficiency projects and changes to operating practices to reduce GHG emissions and make meaningful progress toward our commitment to eliminate routine flaring by 2030. |
| ► | To complement our quantitative GHG goals and further accelerate our net-zero strategy, Occidental participates in several organizations that include additional climate commitments, such as the United Nations-led Oil and |
| (1) | Free cash flow is a non-GAAP financial measure. See Appendix A for a reconciliation to GAAP. |
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Message from the Board of Directors
Gas Methane Partnership 2.0, the Methane Guiding Principles, the World Bank’s Zero Routine Flaring by 2030 initiative and the Oil and Gas Climate Initiative.
| ► | We became the first U.S. upstream oil and gas company to enter into sustainability-linked credit facilities with absolute GHG emissions reductions as the key performance indicator. |
| ► | We continued to advance our carbon management strategy, including further progress on the front-end engineering and design of the world’s largest direct air capture (DAC) facility in the U.S. Permian Basin. |
| ► | We published our 2021 Climate Report, which reflects the four-element framework recommended by the Task Force on Climate-related Financial Disclosures (TCFD). We encourage you to review the report, available online at https://www.oxy.com/globalassets/documents/ sustainability/oxy-climate-report-2021.pdf. |
| ► | We published the company’s climate policy positions and more information on Occidental’s climate advocacy and engagement, including alignment with key trade associations, coalitions and other organizations, in response to shareholder feedback. This disclosure can be accessed on the sustainability page of Occidental’s website and in our 2021 Climate Report. |
| ► | We increased the weighting of sustainability metrics for incentive compensation to 30% of the company performance component of the annual cash incentive award for 2021 and 2022 in response to shareholder feedback and to enhance alignment with the company’s net-zero strategy. |
Sincerely,Human Capital and Diversity: Occidental’s culture of diversity, inclusion and belonging (DIB) supports an environment where employees’ differences are appreciated, celebrated and encouraged, with the goal that all employees are included and everyone feels that they belong. Societal events over the past two years involving racial and ethnic injustice underscore that much work remains to be done. The Board endorses management’s position that racism and bigotry have no place at Occidental. To enhance Occidental’s DIB programs and practices, as well as the company’s human capital management generally:
 |  | We disclosed the workforce diversity data from the Consolidated EEO-1 Report that Occidental submitted in 2021 to the U.S. Equal Employment Opportunity Commission for the 2020 fiscal year in response to shareholder feedback. We encourage you to review the report, available online at https://www.oxy.com/ globalassets/documents/sustainability/oxy-eeo1- consolidated-2020.pdf. |
| ► | We formed a DIB Advisory Board and the DIB Ambassador Committee to support Occidental’s DIBstrategy, both of which are discussed in more detail in the “Corporate Governance” section under “Sustainability.” |
| ► | We hosted an inaugural company-wide DIB live event in October 2021 to promote awareness, engagement and best practices and emphasize the importance of diversity to our future success. The event was employee-led with participation from senior leadership and the Board of Directors. |
Governance and Board Refreshment: The Board iscommitted to robust corporate governance structures and practices that support Occidental’s efforts to build long-term shareholder value. The Board understands and shares investors’ goals for an appropriate balance of tenure, skills and backgrounds, including diversity of personal characteristics, among our membership and is committed to ongoing and thoughtful refreshment. Earlier this month, the Board added Vicky A. Bailey to the Board, which marked our fourth new independent director since 2019. The Boardcontinues to seek additional members to enhance the diverse viewpoints and expertise currently represented on the Board.
SHARE YOUR VIEWS
As always, we value your views and encourage you to share your opinions with us. This past year, Occidental proactively engaged with shareholders collectively representing a majority of shares outstanding, with independent director participation in many of these discussions. Going forward, Occidental remains committed to regular and transparent engagement with shareholders and other stakeholders, and shareholder feedback will continue to inform our viewpoints and decisions. If you would like to write to the Board, you may address your correspondence to the Board of Directors, in care of the Corporate Secretary, Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046.
Thank you for your continued support of Occidental. We are grateful to serve on your behalf.
Sincerely,
On Behalf of Your Board,
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JACK B. MOORE |
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VICKI HOLLUB |  |
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| Notice of Annual Meeting of Shareholders |
You are cordially invited to attend Occidental’s 2022 Annual Meeting of Stockholders
Occidental’s 2018Shareholders (2022 Annual Meeting of Stockholders willMeeting), to be held at 9:00 a.m. Central Time on Friday, May 4, 2018,6, 2022, via live webcast at the Occidental Petroleum Conference Center, 5 Greenway Plaza, Houston, Texas 77046.www.virtualshareholdermeeting.com/OXY2022
 | DATE AND TIME Friday, May 6, 2022 at |  | LOCATION Live webcast: |  | RECORD DATE Each shareholder of record as of the close of business on March 11, 2022 (the record date) is entitled to receive notice of, attend and vote at the meeting. |
ITEMS OF BUSINESS
AtAt the meeting, stockholdersour shareholders will be asked to act on the following mattersfollowing matters and consider allany other matters properly brought beforematters as may properly come before the meeting:
| PROPOSAL | MORE INFORMATION | ||||||
| 1. Elect the | |||||||
| FOR | Page 14 | ||||||
| FOR | Page 35 | ||||||
| FOR | Page 74 | ||||||
| 4. Act on a shareholder proposal requesting Occidental set and disclose quantitative short-, medium- and long-term GHG emissions reduction targets consistent with the Paris Agreement, if properly presented | |||||||
| AGAINST |
Notice and Attendance
A Notice of Internet Availability (NOIA) or proxy card is being mailed beginning on or about March 22, 201825, 2022 to each stockholdershareholder of record as of the closerecord date. In light of business on March 9, 2018, which iscurrent information and guidance about the COVID-19 pandemic, to protect the health and well-being of our employees and shareholders, we have decided to hold the 2022 Annual Meeting solely by virtual means. Shareholders of record as of the record date forwill be able to attend the determination2022 Annual Meeting via live webcast, view the list of stockholders entitled to receive noticeour shareholders of attendrecord, vote and vote at the meeting. Admittance tosubmit questions during the meeting will require an admission ticket.by visiting www.virtualshareholdermeeting.com/OXY2022. To participate in the Annual Meeting, shareholders of record must enter the 16-digit control number that appears on their proxy card. If shareholders hold their shares in street name and their voting instruction form indicates that they may vote those shares through the http://www.proxyvote.com website, then they may join the 2022 Annual Meeting with the 16-digit access code indicated on that voting instruction form. Otherwise, shareholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least five days before the 2022 Annual Meeting) and obtain a “legal proxy” in order to be able to join the 2022 Annual Meeting. We intend to return to hosting in-person annual meetings in 2023. Please see ”Admission to“Questions and Answers about the Annual Meeting”Meeting and Voting” on page 6482 for details.additional information.
HOW TO VOTE
WhetherYour vote is extremely important. Regardless of whether or not you plan to attend the meeting or not,2022 Annual Meeting, we encourage you to vote by following the internet or telephone instructions provided in the Notice of Internet Availability. If you received a paper copyusing any of the proxy materials or a voting instruction form, you may also vote by marking, signing and returning the proxy card or voting instruction form in the envelope provided.methods listed below. This will ensure that your shares are represented and will save Occidental additional expenses of soliciting proxies.
By Order of the Board,
H. Elliott Heide
Vice President and Corporate Secretary
Occidental Petroleum Corporation
INTERNET | CALL | MAIL | VIRTUAL MEETING |
| Online using your smartphone or computer at the website listed on the NOIA, proxy card or voting instruction form | By telephone call to the toll-free number listed on your proxy card or voting instruction form | Completing, signing and returning your proxy card or voting instruction form in the postage-paid envelope provided | If you plan to participate in the 2022 Annual Meeting via the live webcast, you may vote online during the meeting using your smartphone or computer |
March 22, 2018
If you have any questions or require any assistance in voting your shares, please contact Alliance Advisors, Occidental’s proxy solicitor, toll-free at 844-885-0175 or at 210-209-8052 or by email at oxy@ allianceadvisors.com.
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 NICOLE E. CLARK Vice President, Deputy General Counsel and Corporate Secretary March 25, 2022 |
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| Table of Contents |
| Message from the Board of Directors | 1 | |
| Notice of Annual Meeting of Shareholders | 3 | |
| Proxy Statement Summary | 5 |
| PROPOSAL 1 | |||
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| Audit Related Matters | 74 | |
| Ratification of Selection of Independent Auditor | 75 | |
| Report of the Audit Committee | 75 |
| PROPOSAL 4 |
This section highlights certain important information presented in this Proxy Statement and is intended to assist you in evaluating the matters to be voted on at the meeting. We encourage you to read the Proxy Statement in its entirety before you cast your vote. For more information regarding Occidental’s 2017 performance, please review Occidental’s Annual Report on Form 10-K for the year ended December 31, 2017 (the Annual Report).
Matters to be Voted on
How to Vote
You can vote using any of the following methods:
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Corporate Governance Highlights
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| Proxy Statement Summary |
This section highlights certain important information presented in this proxy statement and is intended to assist you in evaluating the matters to be voted on at the meeting. We encourage you to read the proxy statement in its entirety before you cast your vote. For more information regarding Occidental’s 2021 performance, please review Occidental’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the Annual Report).
Agenda Items and Voting Recommendations
Proposal 1 | Election of Directors |
See page 14 | |
The Governance Committee recommended to the Board, and the Board approved, the nomination of the nine persons whose biographies appear on pages 15-20 to serve for a one-year term ending at the 2023 Annual Meeting, but in any event, until his or her successor is elected and qualified, unless ended earlier due to his or her death, resignation, disqualification or removal from office. |
Proposal 2 | Advisory Vote to Approve Named Executive Officer Compensation |
See page 35 | |
The executive compensation program for the named executive officers includes many best-practice features that are intended to enhance the alignment of compensation with the interests of Occidental’s shareholders. The executive compensation program is described in the Compensation Discussion and Analysis (CD&A) section beginning on page 36 of this proxy statement. |
Proposal 3 | Ratification of Selection of KPMG as Occidental’s Independent Auditor |
See page 74 | |
The Audit Committee of the Board of Directors of Occidental has selected KPMG LLP as independent auditor to audit the consolidated financial statements of Occidental and its subsidiaries for the year ending December 31, 2022. As a matter of good corporate governance, the Board of Directors of Occidental submits the selection of the independent auditor to our shareholders for ratification. |
Proposal 4 | Shareholder Proposal Requesting Occidental Set and Disclose Quantitative Short-, Medium- and Long-Term GHG Emissions Reduction Targets Consistent with the Paris Agreement |
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Occidental expects this shareholder proposal to be introduced at the 2022 Annual Meeting. The Board of Directors disclaims any responsibility for the content of the proposal and for the statements made in support thereof, which, except for minor formatting changes, is presented in the form received from the shareholder proponent. The shareholder proposal is required to be voted on at the 2022 Annual Meeting only if it is properly presented. Because the Board believes Occidental has already set and disclosed quantitative short-, medium- and long-term goals for its Scope 1, 2 and 3 emissions that align with the goals of the Paris Agreement and are inextricably linked with the company’s long-term corporate strategy, the Board recommends a vote “AGAINST” this proposal. |
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Occidental Petroleum Corporation 5
Proxy Statement Summary
Director Nominees and Current Committee Memberships Composition Highlights
Director Nominee Highlights
It is the Board’s policyThe Board seeks to achieve a diverse and broadly inclusive membership. TheOur Board’s director nominees bring varying perspectives to the boardroom by virtue of their diverse backgrounds and experiences, qualifications, skills, gender, ethnicitygenders, ethnicities and tenuretenures on the Board. To better convey the well-roundedness of Occidental’s Board,our Board’s director nominees, we have included a skills matrix on page 1621 that identifies the particular core competencies of each of our Board’s director nomineenominees that have contributed to his or her nomination to the Board.
President, Chief Executive Officer and Chairman, Magnolia Oil & Gas Corporation
Proxy Statement Summary
Proxy Statement Summary Corporate Governance Highlights
Shareholder Engagement Occidental is
Proxy Statement Summary Meaningful Dialogue with Shareholders on In early 2021, we began engaging with Follow This on a proposal that they submitted on behalf of one of our shareholders, Benta B.V. (BBV), for inclusion in our 2021 proxy statement regarding adoption of a medium-term Scope 3 emissions target. After a series of productive conversations, Occidental committed to announce a medium-term net emissions reduction target (around 2030) as part of the pathway to our 2050 net-zero ambition before the 2022 Annual Meeting in exchange for the withdrawal of the proposal. Fulfilling that commitment, in December 2021, Occidental set a medium-term emissions reduction target to facilitate 25 million metric tons per year of geologic storage or utilization of captured carbon dioxide (CO2) in our value We continued our engagement with Follow This during our recent fall/winter off-season engagement and, in early 2022, began engaging with Follow This on a proposal they submitted on behalf of BBV requesting that Occidental set and publish quantitative targets covering the short-, medium-, and long-term GHG emissions of the company’s operations and the use of our energy products (Scope 1, 2 and 3) that are aligned with the Paris Agreement (Paris or Paris Agreement). Unfortunately, after a series of discussions with Follow This, we were unable to reach an agreement for withdrawal. As explained later in our Board’s Statement in Opposition on page 78, we believe this proposal is misdirected in part because Occidental has already set and disclosed quantitative short-, medium- and long-term goals for Occidental’s Scope 1, 2 and 3 emissions that we believe align with the goals of the Paris Agreement. In particular, we believe that our recently-set medium-term Scope 1, 2 and 3 target reflects a trajectory toward our long-term net-zero goals consistent with the ramp-up of the commercialization of carbon capture, utilization and storage (CCUS) and direct air capture (DAC) technologies assumed in a range of external scenarios (such as the International Energy Agency (IEA) Net Zero Emissions scenario, the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C mitigation pathway scenarios and Princeton University’s Net-Zero America research). Additionally, as we have discussed with Follow This during our recent conversations regarding the proposal and Occidental’s net-zero strategy, the Scope 1, 2 and 3 emissions reduction targets and ambitions that Occidental has set are inextricably linked to the strategy adopted by our executive team and our Board of Directors. We encourage you to read the proposal and our Board’s Statement in Opposition, beginning on page 78, for further details on these important matters. Occidental is committed to being a part of the climate solution and, in conjunction with our ongoing engagement with shareholders and other stakeholders, will carefully develop and implement policies and practices to reduce greenhouse gas emissions. We were the first U.S.-based global oil and gas company to include Scope 3 emissions within the scope of our net-zero goals. We also were the first U.S. oil and gas company to be recognized by Transition Pathway Initiative as in alignment with the 1.5°C path and noted as the only oil and gas company who plans to reduce its 2021 Business Performance Highlights Overview Occidental’s principal businesses consist of three We conduct operations internationally, with assets primarily in the United States, the Middle East and North Africa. We are one of the largest oil producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico. We are regarded as a premier partner in Oman, the United Arab Emirates and Algeria. (3) How ambitious are oil and gas companies’ climate goals? (2021, October 22). Science, 374 (6566). https://www.science.org/doi/10.1126/science.abh0687
Proxy Statement Summary 2021 Performance Highlights For information regarding the relationship between our performance highlights and the executive compensation program, please see “Compensation Discussion and Analysis,” beginning on page 36.
► Established additional quantitative short-and medium-term targets for Occidental’s Scope 1, 2 and 3 emissions that align with the goals of the Paris Agreement and support Occidental on our path to achieving net zero. ► Progressed the work of OLCV with continued focus on projects aimed at reducing our carbon footprint, including the world’s largest DAC and sequestration plant. ► Completed large-scale divestiture program with approximately $2.0 billion in net proceeds from divestitures in 2021, before purchase price adjustments, which were largely used to repay debt and reduce other liabilities.
► Exceeded initial 2021 production guidance by 27 millions of barrels of oil equivalent per day (Mboed) within the company’s original capital budget. ► Set multiple drilling and completion records across Occidental’s domestic and international businesses. ► Ended 2021 with proved reserves of approximately 3.5 billion barrels of oil equivalent (Boe), reflecting an increase of approximately 0.6 billion Boe over year-end 2020. ► Delivered average Delaware Basin six-month cumulative oil production 34% above the basin average while using less proppant than competitors.
► Generated operating cash flow from continuing operations of $10.3 billion and record free cash flow of $8.8 billion.(4) ► Reduced face value of borrowings by $6.7 billion and retired interest rate swaps with a notional value of $750 million. ► Made substantial progress toward the company’s net debt target of $25 billion, and set a new goal of reducing debt by a further $5 billion in the short-term and regaining investment grade credit ratings in the medium-term. ► Generated record OxyChem earnings of $1.54 billion.
► Launched Occidental’s Operating Management System (OMS), which integrates our systems for health, safety, environmental and sustainability performance, asset integrity, risk management and operational excellence. ► Continued proactive health and safety protocols to reduce the risk of transmission of COVID-19 and its new variants at work sites across our global operations. ► Continued to emphasize safety in the workplace and championed Occidental’s Life-Saving Rules program, which is designed to help the company’s workforce identify and understand potential hazards and apply safeguards to prevent or mitigate incidents. ► Joined the Onshore Safety Alliance and committed to the American Petroleum Institute’s (API) Energy Excellence program. (4) Free cash flow is a non-GAAP financial measure. See Appendix A for a reconciliation to GAAP.
Proxy Statement Summary
► Became the first U.S. upstream oil and gas company to enter into sustainability-linked credit facilities with absolute GHG emissions reductions as the key performance indicator. ► Endorsed the World Economic Forum’s Stakeholder Capitalism Metrics, Methane Guiding Principles and the United Nations-led Oil and Gas Methane Partnership 2.0 and, through OLCV, serve as a founding partner in the CCS+ Initiative to advance carbon accounting with the goal of scaling up global decarbonization and carbon removal. ► Commenced front-end engineering and design (FEED) for the company’s first DAC facility in May 2021, which is expected to be completed in the first half of 2022, with construction slated to commence in the second half of 2022. ► Delivered the world’s first shipment of carbon-neutral oil. ► Continued to implement new facility designs, retrofitting ofexisting equipment, energy efficiency projects and changes to operating practices to reduce GHG emissions from ongoing and new operations by consolidating production facilities,electrifying equipment, retrofitting or replacing high-bleed pneumatic valves with low or no-bleed valves, and designing compression projects to advance Occidental’s commitment to eliminate routine flaring by 2030, among other actions. ► Continued to dedicate resources to advancing CCUS projects for anthropogenic (human-made) carbon dioxide and announced additional OLCV projects and partnerships, including investments to advance innovative low-carbon technology. ► Recycled significant volumes of produced water through Occidental’s Water Recycling Facilities in New Mexico and Texas, which has enabled us to reduce sourcing of fresh water while also reducing produced water disposal in our Permian operations. ► Disclosed the workforce diversity data from the Consolidated EEO-1 Report that Occidental submitted in 2021 to the U.S. Equal Employment Opportunity Commission for the 2020 fiscal year. ► Formed a DIB Advisory Board and the DIB Ambassador Committee to support Occidental’s DIB strategy. Executive Compensation Program Summary The Compensation Committee strives to maintain a compensation program that will attract, retain and motivate outstanding executives by providing incentives to reward them for superior performance that supports Occidental’s long-term strategic objectives, whether in an up- or down-cycle commodity price environment, and is competitive with industry practices. The primary elements of executive compensation are “direct compensation” and consist of base salary, an annual cash incentive award and long-term incentive awards. Direct compensation is heavily weighted toward long-term incentive awards. In 2021, Ms. Hollub’s target direct compensation consisted of: long-term incentive awards conditioned on Occidental’s three-year TSR and CROCE performance (37.50%); time-vesting RSU awards (18.75%); and NQSOs (18.75%) (terms defined below).
Proxy Statement Summary Allocation of Direct Compensation Elements in 2021 A substantial majority of named executive officer (NEO) compensation is dependent on performance. 90% of Ms. Hollub’s (and an average of 84% of the other NEOs’) target direct compensation opportunity is variable, or at risk. The ultimate value of at risk compensation is dependent on company performance outcomes, the result of the Compensation Committee’s assessment of each individual’s performance and Occidental’s stock price performance. CEO TARGET DIRECT COMPENSATION MIX(1) — 90% VARIABLE/AT RISK 
Alignment of Target Compensation with Shareholder Experience Following the challenges posed by the COVID-19 pandemic and the collapse in oil and gas prices in 2020, the Compensation Committee reduced CEO direct target compensation for 2021 as shown in the graph below to further align CEO compensation with our shareholder experience. CEO DIRECT TARGET COMPENSATION REDUCTION FOR 2021  * Set by the Compensation Committee in February 2020
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Chair 
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Health, Safety & Environmental
Occidental Petroleum Corporation 7
Proxy Statement Summary
Highlights of Executive Compensation Program Policies and Practices
The 2021 executive compensation program for the named executive officersNEOs includes many best-practice features that are intended to enhance the alignment of compensation with the interests of Occidental’s stockholders:shareholders.
| | WHAT WE DO ✓Pay-for-Performance.A substantial majority of NEO compensation is performance-based. The Compensation Committee reviews the metrics underlying the long-term incentive award program and annual cash incentive (ACI) awards annually to evaluate their continued alignment with Occidental’s business priorities. ✓Act on Shareholder Feedback.Shareholder feedback influences the executive compensation program and contributed to the Compensation Committee’s decisions to maintain total CEO target compensation for 2021 at a 29% reduction from pre-COVID levels and increase the weighting of sustainability metrics to 30% for the company performance portion of the ACI award opportunity. The favorable response from shareholders on the latter informed the Compensation Committee’s decision to maintain the sustainability metric as well as the weighting for the 2022 ACI award. ✓Clawback in the Event of Misconduct.The Compensation Committee has the authority to claw back ACI awards and long-term incentive awards for violations of Occidental’s Code of Business Conduct and related policies. ✓Emphasize Stock Ownership.Cash Return on Capital Employed (CROCE) and Total Shareholder Return (TSR) awards are payable in shares of common stock and the net shares received upon each Restricted Stock Unit (RSU) award vesting are subject to a two-year holding period. In addition, the named executive ✓Monitor Compensation Program for Risk.The executive compensation |  |
✓Use Double-Trigger Equity Vesting for Equity Awards.Pursuant to the Amended and Restated 2015 Long-Term Incentive Plan (2015 LTIP), equity awards vest in the event of a change in control only if there is also a qualifying termination of employment. ✓Use Relative and Absolute Performance Measures for Equity Awards.Performance equity is earned based on both relative shareholder returns and absolute financial returns, with TSR awards capped if Occidental’s absolute TSR is negative. |
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✕No Dividend Equivalents on Unvested Performance Awards. Under the 2015 LTIP, dividends and dividend equivalent rights are subject to the same performance goals as the underlying award and will not be paid until the performance award has vested and becomes earned (except in ✕No Hedging or Derivative Transactions. Occidental’s directors, executive officers and all other employees are not permitted to engage in transactions designed to hedge or offset the market value of Occidental’s equity securities. ✕No Golden Parachute Payments. Our golden parachute policy provides that, subject to certain exceptions, Occidental will not grant golden parachute benefits (as defined in the policy) to any executive officer which exceed 2.99 times his or her salary plus ACI award without shareholder approval. ✕No Repricing of Stock Options. Other than in connection with a corporate transaction involving Occidental, the 2015 LTIP does not permit the repricing of stock options or stock appreciation rights without shareholder approval. |
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Elements of the 2017 Executive Compensation Program
The Compensation Committee reviews and sets each element of the compensation program at its February committee meeting so that the allocation of compensation among the varying compensation elements reflects Occidental’s compensation philosophy, which emphasizes long-term, performance-based pay. The majority of named executive officer compensation is performance-based, and can only be realized if Occidental meets applicable performance goals.
(1) Compensation as reported in the Summary Compensation Table (see page 37).
(2) Percentages are based on the grant date fair value of the long-term incentive awards.
For more information regarding the 2017 executive compensation program, and recent changes to the executive compensation program, please see the Compensation Discussion and Analysis section of this proxy statement beginning on page 22.
2018 Notice of Annual Meeting and Proxy Statement 8
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The Board is committed to recruiting and nominating directors for election who will collectively provide the Board with the necessary diversity of skills, backgrounds and experiences to meet Occidental’s ongoing needs and support oversight of our business strategy and priorities. In recommending candidates for election to the Board, the Corporate Governance and Nominating Committee (the Governance Committee) evaluates a candidate’s character; judgment; their skill set and experience in light of Occidental’s needs;current and future needs and strategic priorities; independence; other time commitments, including other public and private company board memberships; and any other factors that the Governance Committee deems relevant. In addition, in determining whether to recommend incumbent directors for re-electionreelection to the Board, the Governance Committee also reviews and considers the director’s board and committee meeting attendance; the level of support that the director’s nomination received at the most recent annual stockholders’ meeting;shareholders’ meeting (if applicable); and the well-roundedness of the Board as a whole.
The Board is committed to ongoing and thoughtful refreshment of its membership and strives to maintain an appropriate balance of tenure, backgrounds and skills on the Board. The Board believes that this ongoing refreshment, which has resulted in four new directors since 2019, further aligns Board composition with the needs of Occidental as our business evolves over time and encourages regular consideration of fresh viewpoints and perspectives. The Board also believes that over time, directors develop an enhanced understanding of Occidental and an ability to work effectively as a group. Accordingly, the Board aims to have directors with a mix of tenures represented. In addition, the Board and the Governance Committee actively consider diversity in their recruitment and nominations of director candidates, and the effectiveness of these efforts is actively assessed during regular reviews of the Board’s composition.
Effective as of March 4, 2022, Gary Hu and Andrew Langham tendered their resignations pursuant to Section 1(d) of the Director Appointment and Nomination Agreement with Carl C. Icahn and certain affiliated persons, which Occidental entered into on March 25, 2020. Subsequently, the Board appointed Vicky A. Bailey as its newest member, effective March 22, 2022. In addition, Margarita Paláu-Hernández will not stand for re-election at the 2022 Annual Meeting and, accordingly, will retire from the Board at the 2022 Annual Meeting. The Board thanks Messrs. Hu and Langham and Ms. Paláu- Hernández for their service and welcomes Ms. Bailey to the Board.
In 2018,light of these developments, the Governance Committee recommended to the Board, and the Board approved, the nomination of the eleven individuals identifiednine persons whose biographies appear below for election as directors. Unless you specify differently, proxies received will be voted FOR Spencer Abraham, Howard I. Atkins, Eugene L. Batchelder, John E. Feick, Margaret M. Foran, Carlos M. Gutierrez, Vicki Hollub, William R. Klesse, Jack B. Moore, Avedick B. Poladian and Elisse B. Walter to serve for a one-year term ending at the 20192023 Annual Meeting, but in any event, until his or her successor is elected and qualified, unless ended earlier due to his or her death, resignation, disqualification or removal from office.
About Following the Director Nominees
Allresignations and the appointment of Ms. Bailey, the Board determined to decrease the size of the director nominees are currentlyBoard from eleven to ten directors; and the size of the Board will be reduced to nine directors of Occidental who were elected by stockholderseffective at the 2017opening of the polls at the 2022 Annual Meeting. In
The Board appreciates the eventvalue of diversity of backgrounds and experiences among its membership and shares investors’ goals for racial, ethnic and gender diversity on boards. Accordingly, the Board is actively seeking additional members to enhance the diverse viewpoints and expertise currently represented on the Board and to increase the Board’s racial, ethnic and gender diversity.
If you submit a validly executed proxy card but do not specify how you want to vote your shares with respect to the election of directors, then your shares will be voted “FOR” the nominees proposed by our Board and named in this proxy statement, in line with our Board’s recommendation. The Board has no reason to believe that any nomineeof the Board’s nominees would be unable or
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Proposal 1: Election of Directors
unwilling to serve as a director if elected. However, should any of our Board’s nominees be unavailableunable or unwilling to servestand for election at the time of the meeting, the2022 Annual Meeting, proxies may be voted for a substitute nominee selected by the Board, of Directors, or the Board of Directors may reduce the number of directors.
Pursuant to Occidental’s By-laws, in an uncontested election, the affirmative vote of a majority of votes cast with respect to each director nominee will be required for the nominee to be elected, meaning that the number of votes cast “FOR” a director must exceed the number of votes cast “AGAINST” that director. Your broker will not vote your shares on this proposal unless you give voting instructions, and abstentions and broker non-votes have no effect on the vote. Any nominee for director who does not receive a greater number of votes “FOR” his or her election than votes “AGAINST” in an uncontested election must tender his or her resignation. Unless accepted earlier by the Board, such resignation will become effective on October 31 of the year of the election.
All of the nominees are currently directors of Occidental who were elected by shareholders at the 2021 Annual Meeting, except for Ms. Bailey, who was appointed to eliminate the vacancy.
Board in March 2022.
Biographical information with respect to each of theour Board’s director nominees, together with a list of the core competencies that ledcontributed to the conclusiondetermination that such person should serve as a director, is presented below. An overview of the core competencies of each of our Board’s director nominee arenominees is featured in a skills matrix on page 16.
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(5) As announced by Williams in 2021, Mr. Chazen’s final term on the Williams board will end at Williams’ annual meeting in April 2022.
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Proposal 1: Election of Directors
| JACK B. MOORE |
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Proposal 1: Election of Directors
| VICKY A. BAILEY |
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Proposal 1: Election of Directors
| ANDREW GOULD |
2018 Notice of Annual Meeting and Proxy Statement 10
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| CARLOS M. GUTIERREZ
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Secretary Gutierrez is Co-Founder, Executive Chairman and CEO of EmPath, Inc., a skills intelligence software technology company. Previously, Secretary Gutierrez was Co-Chair of Albright Stonebridge Group, a commercial diplomacy and strategic advisory | |||||||||||
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Executive Compensation | Financial Reporting/ Accounting Experience | Government, Legal & Regulatory | International Experience | Investor Relations | Public Company Executive Experience | Risk Management | |||||
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2018 Notice of Annual Meeting and Proxy Statement 12
Proposal 1: Election of Directors
| VICKI HOLLUB |
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| Ms. Hollub became President and Chief Executive Officer of Occidental Petroleum Corporation in April 2016. She has been a member of Occidental’s Board of Directors since 2015. During her 35-year career with Occidental, Ms. Hollub | |||||||||||
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Environmental, Health, Safety & Sustainability | Financial Reporting/ Accounting Experience | Government, Legal & Regulatory | Industry Background | International Experience | Public Company Executive Experience | Risk Management | |||||
| WILLIAM R. KLESSE |
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| Mr. Klesse is the former Chief Executive Officer and former Chairman of the Board of Valero Energy Corporation (Valero), an international manufacturer and marketer of transportation fuels, other petrochemical products and power. He joined the Valero board as Vice Chairman in 2005 and served as Chairman of the Board from 2007 until his retirement in December 2014. From 2006 to May 2014, he served as Chief Executive Officer of Valero and served as President from 2008 to 2013. From 2003 to 2005, Mr. Klesse was Valero’s Executive Vice President and Chief Operating Officer. Prior to that, he served as Executive Vice President of Refining and Commercial Operations following Valero’s 2001 acquisition of Ultramar Diamond Shamrock Corporation, where he had been Executive Vice President of the company’s refining operations. Mr. Klesse began his 40-plus year career in the energy industry at Diamond Shamrock Corporation, which merged with Ultramar Corporation in 1996. Mr. Klesse is a trustee of the University of Dayton, Texas Biomedical Research Institute and United Way of San Antonio and Bexar County and serves on the Advisory Board of the San Antonio Food Bank. He also serves on the boards of The Briscoe Western Art Museum and Christus Santa Rosa Foundation. Mr. Klesse holds a bachelor’s degree in Chemical Engineering from the University of Dayton and a Master of Business Administration with an emphasis in Finance from West Texas A&M University. | |||||||||||||
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Environmental, Health, Safety & Sustainability | Executive Compensation | Finance/ Capital Markets | Financial Reporting/ Accounting Experience | Industry Background | Investor Relations | Public Company Executive Experience | Risk Management | ||||||
| 2022 PROXY STATEMENT | ||
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Proposal 1: Election of Directors
| AVEDICK B. POLADIAN |
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| Mr. Poladian is currently a director and the former Executive Vice President and Chief Operating Officer (2002-2016) of Lowe Enterprises, Inc., a privately-held diversified national real estate company active in commercial, residential and hospitality property investment, management and development. | |||||||||||
2018 Notice of Annual Meeting and Proxy Statement 14
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| ROBERT M. SHEARER | |||||
Occidental Petroleum Corporation 15
Summary of Director Nominee Core Competencies and Composition Highlights
The following chart summarizes the competencies that the Board considers valuable to effective oversight of the Company, and illustrates how the current Board members individually and collectively represent these key competencies. The lack of an indicator for a particular item does not mean that the director does not possess that qualification, skill or experience. We look to each director to be knowledgeable in these areas; rather, the indicator represents that the item is a core competency that the director brings to the Board.
Abraham Atkins Batchelder Feick Foran Gutierrez Hollub Klesse Moore Poladian Walter CORPORATE GOVERNANCE contributes to the Board’s understanding of best practices in corporate governance matters • • • • • ENVIRONMENTAL, HEALTH, SAFETY & SUSTAINABILITY contributes to the Board’s oversight and understanding of EHS and sustainability issues and their relationship to the company’s business and strategy • • • • • • EXECUTIVE COMPENSATION contributes to the Board’s ability to attract, motivate and retain executive talent • • • • • • • • FINANCE/CAPITAL MARKETS valuable in evaluating Occidental’s financial statements, capital structure and financial strategy (dividends/stock repurchases/financing) • • • • • • FINANCIAL REPORTING/ACCOUNTING EXPERIENCE critical to the oversight of the company’s financial statements and financial reports • • • • • • • • GOVERNMENT, LEGAL & REGULATORY contributes to the Board’s ability to interpret regulations and understand complex legal matters and public policy issues • • • • • • • INDUSTRY BACKGROUND contributes to a deeper understanding of our business strategy, operations, key performance indicators and competitive environment • • • • • INTERNATIONAL EXPERIENCE critical to cultivating and sustaining business and governmental relationships internationally and providing oversight of our multinational operations • • • • • INVESTOR RELATIONS contributes to the Board’s understanding of investor concerns and perceptions • • • • • PUBLIC COMPANY EXECUTIVE EXPERIENCE contributes to the Board’s understanding of operations and business strategy and demonstrated leadership ability • • • • • • • • RISK MANAGEMENT contributes to the identification, assessment and prioritization of risks facing the company • • • • • • • • • • • TECHNOLOGY/CYBER SECURITY contributes to the Board’s understanding of information technology and cyber security risks • • •
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Corporate Governance | Environmental, Health, Safety & Sustainability | Finance/ Capital Markets | Financial Reporting/ Accounting Experience | Industry Background | International Experience | Investor Relations | |
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Proposal 1: Election of Directors
Summary of the Board’s Director Nominee Core Competencies and Composition Highlights
The following chart summarizes the competencies that the Board considers valuable to effective oversight of Occidental and illustrates how our Board’s director nominees individually and collectively represent these key competencies. The lack of an indicator for a particular item does not mean that the director does not possess that qualification, skill or experience as we look to each director to be knowledgeable in these areas; rather, the indicator represents that the item is a core competency that contributed to his or her nomination to the Board.
| Chazen | Moore | Bailey | Gould | Gutierrez | Hollub | Klesse | Poladian | Shearer | ||
 | Corporate Governance contributes to the Board’s understanding of best practices in corporate governance matters | l | l | l | ||||||
 | Environmental, Health, Safety & Sustainability contributes to the Board’s oversight and understanding of EHS and sustainabilityissues and their relationship to the company’s business and strategy | l | l | l | l | l | l | |||
 | Executive Compensation contributes to the Board’s ability to attract, motivate and retain executive talent and to align compensation programs with shareholder interests | l | l | l | l | l | l | |||
 | Finance/Capital Markets valuable in evaluating Occidental’s capital structure, capital allocation and financial strategy (dividends/stock repurchases/financing) | l | l | l | l | l | ||||
 | Financial Reporting/Accounting Experience critical to the oversight of the company’s financial statements and financial reports | l | l | l | l | l | l | l | l | l |
 | Government, Legal & Regulatory contributes to the Board’s ability to navigate regulatory dynamics and understand complex legal matters and public policy issues | l | l | l | l | |||||
 | Industry Background contributes to a deeper understanding of our business strategy, operations, key performance indicators and competitive environment | l | l | l | l | l | l | l | ||
 | International Experience critical to cultivating and sustaining business and governmental relationships internationally and providing oversight of our multinational operations | l | l | l | l | l | l | |||
 | Investor Relations contributes to the Board’s understanding of shareholder concerns and perceptions | l | l | l | l | l | ||||
 | Public Company Executive Experience contributes to the Board’s understanding of operations and business strategy and demonstrates leadership ability | l | l | l | l | l | l | l | ||
 | Risk Management contributes to the identification, assessment and prioritization of significant risks facing the company | l | l | l | l | l | l | |||
 | Technology/Cyber Security contributes to the Board’s understanding of information technology and cyber risks |  |  | l |
| 2022 PROXY STATEMENT | ||
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2018 Notice of Annual Meeting and Proxy Statement 16
Proposal 1: Election of Directors
INDEPENDENCE Occidental’s governance policies require that independent directors comprise at least two-thirds of the members of the Board (a policy that exceeds NYSE requirements). The Board has affirmatively determined that each of our Board’s director nominees, other than Ms. Hollub, is independent.(6) | TENURE The average tenure of our Board’s director nominees is approximately 6.8 years, which we believe reflects a balance of company experience and new perspectives.
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AGE The average age of our Board’s director nominees is approximately 70 years, with the nominees ranging from 62 to 75 years old.
| DIVERSITY The Board is committed to achieving a diverse and broadly inclusive membership. We recently added Ms. Bailey as a director and continue to seek additional members to enhance the diverse viewpoints and experiences currently represented. | |
| (6) | The Board also determined that Margarita Paláu-Hernández, who is not standing for re-election, Gary Hu and Andrew N. Langham, who served as directors until March 2022, and Nicholas Graziano, who served as a director until February 2021, each qualified as independent during his or her service on the Board. |
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CORPORATE GOVERNANCECorporate Governance
Occidental’s corporate governance policies (the Corporate Governance Policies) establish Occidental’s governance framework. The Board’s Corporate Governance Policies establish Occidental’s governance framework. The Corporate Governance Policies addressCorporate Governance Policies address the structurestructure and operationoperation of the Board of Directors,Board, including matters related to directormatters related to director independence; retirement; outside board memberships;tenure; outside board memberships; the rolerole of the Board’sBoard’s Independent Chairman; director stock ownership;director stock ownership; and BoardBoard and Committee performance evaluations.Committee performance evaluations. In addition toto the Corporate Governance Policies,Corporate Governance Policies, the BoardBoard has established other stand-alone governancegovernance policies, such asincluding a policy on stockholder rightsshareholder rights plans, a confidential voting policy, a human rightsvoting policy and an independent compensation consultant policy. The Corporate Governance Policies are reviewed at least annuallypolicy. Occidental’s governance policies are reviewed and are updated periodically, along with other governance policies,updated periodically, in light of changing regulations, evolvingregulations, evolving best practicespractices and stockholder feedback.
shaCorporate Governance Highlightsr
eholder feedback. The Corporate Governance Policies and other governance policies are available on our website at www.oxy.com/investors/Governance.
Corporate Governance Highlights
| RELATING TO THE BOARD ►Independent Chairman of the Board | | ►Independent Vice Chairman of the Board ►Annual elections of the entire Board by a majority of votes cast (for uncontested elections) ►Mandatory resignation if a majority vote is not received (for uncontested elections) ►Demonstrated commitment to Board refreshment ►Tenure policy that seeks to maintain an average tenure of 10 years or less for non-employee directors ►Board committees composed entirely of independent directors ►Meaningful director stock ownership guidelines (6x annual cash retainer) with holding requirement ►Annual evaluations of the Board, each committee and individual directors ►One meeting dedicated to strategy discussions every year with an expanded management group, in addition to ongoing strategy oversight | |
| | RELATING TO SHAREHOLDER RIGHTS ►Ability of shareholders to call a special meeting at a 15% threshold ►Ability of shareholders to propose an action by written consent at a 15% threshold ►Shareholder right to proxy access (3% for 3 years, up to 20% of the ►Confidential Voting Policy ►Nominating Policy to consider properly submitted shareholder-recommended director nominees ►No supermajority voting requirements ►Active independent director participation in |
| 2022 PROXY STATEMENT | | ||
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Corporate Governance
Occidental is committed to regular and transparent communication and engagement with its shareholders and other stakeholders. Occidental proactively offers engagement meetings with shareholders collectively representing over a majority of sharesoutstanding and responds to engagement requests as they are received. Feedback from these meetings is shared with directors through senior management reports to the Board and its committees and by virtue of independent director participation in variousshareholder engagements throughout the year.
| | RESPONDING TO FEEDBACK: Engagements in recent years have resulted in several enhancements to Occidental’s practices and disclosures regarding environmental and sustainability matters, including the content of Occidental’s climate reports; matters related to corporate governance, including the adoption of proxy access, the amendments to Occidental’s by-laws and charter to, among other things, facilitate shareholders’ ability to act by written consent and call special meetings; and the executive compensation program, including the design of the long-term incentive program. In 2021, through Occidental’s engagement with Climate Action 100+, we published the company’s climate policy positions and more information on Occidental’s climate advocacy and engagement, including alignment of Occidental’s climate policy positions with those of key trade associations, coalitions and other organizations. We also engaged with As You Sow (AYS) on racial justice, which prompted us to enhance our external disclosure on our DIB program and the company’s position on racial justice. We believe that the company’s priorities are closely aligned with those of AYS’ Racial Justice Initiative and intend to continue our constructive engagement with AYS on racial justice, including racial equity issues and environmental justice. | ||
In 2021, we engaged with shareholders representing approximately 4x our outstanding shares* * Based on average shares outstanding in 2021. Includes each shareholder engagement, except engagements with direct board representation where engagement was counted once. | HOW WE ENGAGED WITH OUR SHAREHOLDERS: ►We proactively engage with our largest shareholders throughout the year, including broad- based engagements in the fall/winter to discuss ESG matters and in advance of the annual meeting to discuss agenda items and any other topics of interest. ►We regularly complete roadshows targeting engagement with specific investors and participate in industry conferences to engage with a broad group of investors. ►We also engage with investors through virtual and in-person meetings, phone calls, and emails. ►We regularly report our shareholders’ views to the Board and respond to feedback, as described below. ►Independent directors participated in many of our engagement meetings. ►The Board’s Sustainability and Shareholder Engagement Committee oversees our shareholder engagement program and provides an avenue for shareholder feedback to be communicated directly to the Board. | ||
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Corporate Governance
Four Pillars of Sustainability
Occidental’s sustainability reporting and strategy align with the World Economic Forum’s (WEF) four pillars of Stakeholder Capitalism: (1) principles of governance, (2) planet, (3) people and (4) prosperity. Each pillar represents a key focus area as we continue to implement and enhance sustainable business practices and programs. We are proud that Occidental was the first U.S. oil and gas company to endorse WEF’s Stakeholder Capitalism Metrics, a global ESG framework that promotes transparency with investor and stakeholder engagement.
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Reporting on Performance. Occidental’s climate report, CDP Climate Report, CDP Water Report and Annual Performance Summary Table with information regarding our environmental, health, safety and social performance are available for download on Occidental’s website. Our disclosure leverages sustainability reporting frameworks and standards supported by investors and other stakeholders, including the recommendations of the TCFD, the disclosure standards set by the Sustainability Accounting Standards Board (SASB) and the IPIECA Sustainability Reporting Guidance.
2021 SUSTAINABILITY HIGHLIGHTS ►Became the first U.S. upstream oil and gas company to enter into sustainability-linked credit facilities with absolute GHG emissions reductions as the key performance indicator. ►Endorsed the World Economic Forum’s Stakeholder Capitalism Metrics, Methane Guiding Principles and the United Nations-led Oil and Gas Methane Partnership 2.0 and, through OLCV, serve as a founding partner in the CCS+ Initiative to advance carbon accounting with the goal of scaling up global decarbonization and carbon removal. ►Commenced FEED for the company’s first DAC facility in May 2021, which is expected to be completed in the first half of 2022, with construction slated to commence in the second half of 2022. ►Delivered the world’s first shipment of carbonneutral oil. | ►Continued to implement new facility designs, retrofitting of ►Continued to dedicate resources to advancing CCUS projects for anthropogenic (human-made) carbon dioxide and announced additional OLCV projects and partnerships, including investments to advance innovative low-carbon technology. ►Recycled significant volumes of produced water through Occidental’s Water Recycling Facilities in New Mexico and Texas, which has enabled us to reduce sourcing of fresh water while also reducing produced water disposal in our Permian operations. | ||
Pathway to Achieve Net Zero
In 2020, we announced that we set a target to reach net-zero emissions associated with our operations and energy use (Scope 1 and 2) before 2040, with an ambition to accomplish before 2035, and an ambition to achieve net-zero emissions associated with our total emissions inventory, including the use of our products (Scope 1, 2 and 3), by 2050. Our pathway to achieve net-zero combines continuous operational upgrades and improvements that lower emissions associated with our oil, gas and chemicals production coupled with industrial-scale carbon management solutions. Ultimately, our goal is leadership in total carbon impact beyond our own corporate inventory of Scope 1, 2 and 3 emissions.
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Corporate Governance
| Net-zero emissions in our operations and energy use (Scope 1 and 2) before 2040, with an ambition to achieve before 2035 | | ||
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Stockholder EngagementOver the past two years, Occidental has established a range of interim targets that address Scope 1, 2 and 3 emissions, using the short- (up to 2025), medium- (2026-2035) and long-term (2036-2050) time frames adopted by Climate Action 100+, to bolster Occidental’s net-zero strategy. Most recently, we set a short-term target to reduce our carbon dioxide equivalent (CO2e) emissions from our operations and purchased energy use by 3.68 million metric tons per year by 2024, compared to Occidental’s 2021 emissions, and a medium-term target to facilitate storage or utilization of 25 million metric tons per year of captured CO2 in Occidental’s value chain by 2032. These targets have been carefully set by management, with oversight from the Board, to capitalize on Occidental’s competitive strengths and reflect insights from scenario modeling and assessments. As depicted in the graphic below, we believe that Occidental’s net-zero pathway is not linear given the ramp-up of the commercialization of CCUS and DAC technology necessary, among other things, to achieve the challenging net-zero goals set by Occidental over the next three decades and beyond.
Occidental is committed to regular and transparent communication and engagement with its stockholders* Artist Rendering
For more information about our company’s Pathway to Net Zero and other stakeholders. Twice annually, Occidental reaches out to engage with stockholders collectively representing over climate-related sustainability initiatives, visit www.oxy.com/Sustainability and see our 2021 Climate Report, a majority of shares outstanding. Feedback from engagement meetings is sharedvailable online at https://www.oxy.com/globalassets/documents/ sustainability/oxy-climate-report-2021.pdf.
Human Capital Management
Diversity, Inclusion and Belonging (DIB). Senior management, with the Board throughsupport of the Board, strives to foster a culture where employees’ differences are appreciated, celebrated and encouraged, with the goal that all employees are included and everyone feels that they belong. To promote awareness, governance and oversight of the company’s DIB program, in the first quarter of 2021, Occidental established the DIB Advisory Board and the DIB Ambassador Committee. The DIB Advisory Board, which is chaired by Occidental’s President and CEO and includes members of senior leadership, oversees the execution of Occidental’s integrated DIB strategy and its alignment with the organization’s mission, vision and strategic objectives. The DIB Advisory Board also helps institutionalize DIB policies for recruitment, retention and development, among other things. The DIB Ambassador
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Committee, which is chaired by Occidental’s Vice President of Diversity and Inclusion, consists of a diverse group of employee representatives from all business segments, domestic and international. This committee leads company-wide initiatives to raise DIB awareness through educational resources and programs.
Workforce Diversity Data. In response to shareholder feedback, we disclosed the workforce diversity data from the Consolidated EEO-1 Report that Occidental submitted in 2021 to the U.S. Equal Employment Opportunity Commission for the 2020 fiscal year. We encourage you to review the report, available online at https://www.oxy.com/globalassets/documents/ sustainability/oxy-eeo1-consolidated-2020.pdf.
Employee Engagement. In late 2020, senior management reports tobegan hosting Quarterly Executive Virtual Conversations, which provide employees the Boardopportunity to hear directly from leadership regarding financial and its committeesoperational updates and by virtue of independent director participation in stockholder engagements. As discussed further below, stakeholder engagement in recent years has resulted in changes to Occidental’s practices and disclosures regarding environmental, health and safety matters; corporate governance; and executive compensation.
submit questions Recent Engagement Efforts.for management to answer. In the fallmost recent forum, through the Q&A portion, employees were able to learn from Occidental leadership on the steps they are taking to ensure women have promotion opportunities for leadership roles and that special teams are diverse and inclusive.
In October 2021, Occidental’s DIB team hosted its inaugural company-wide DIB live event to promote awareness, engagement and best practices and emphasize the importance of 2017, we reached out to over 50 stockholders collectively representing a majority of Occidental’s shares outstanding to engage on environmental, socialdiversity to our future success. The event was employee-led with participation from senior leadership and governance issues, including climate-related risksthe Board.
For more information about our workforce and opportunities; executive compensation matters; and matters related to board composition. A cross-functional team of senior members from Occidental’s environmental, health and safety; investor relations; corporate secretary and legal departments met with over 30 investorscommunity development and other stakeholders to discuss these topics. Atsustainability initiatives, visit www.oxy.com/Sustainability.
Led by the Governance Committee, the Board conducts a majorityrobust annual evaluation of these meetings, one or more of our independent directors participated, demonstrating the Board’s commitment to transparent engagementits performance and the value the Board places on directly hearing the views of our stockholders.
These meetings helped shape our report, “Climate-Related Risks and Opportunities: Positioning for a Lower-Carbon Economy,” which is available for download at www.oxy.com/SocialResponsibility. The release of this report was, in part, in response to a majority-supported stockholder proposal presented at the 2017 Annual Meeting that sought details regarding how Occidental’s capital planning and business strategies incorporate the risks of a lower carbon economy, and a stockholder proposal that requested more transparency regarding Occidental’s efforts to mitigate and set reduction targets for methane emissions and flaring. Our recent stockholder engagement efforts also informed the director skills matrix that we have included in this proxy statement on page 16, which identifies each director’s particular core competencies in tabular format. Details regarding changes to the executive compensation program in light of stockholder feedback are described in more detail in the Compensation Discussion and Analysis section of this proxy statement, beginning on page 22.
Occidental Petroleum Corporation 17
Led by the Governance Committee, the Board conducts a robust annual evaluation of its performance, the performanceperformance of each of the Board’s committeesBoard’s committees and the individual directors.directors. The Governance Committee believesGovernance Committee believes that board evaluations areboard evaluations are a critical tooltool in assessing the composition and effectivenesseffectiveness of the Board, its committeesBoard, its committees and its directors,its directors and presentspresents an opportunity toopportunity to identify areasareas of strengthstrength and areasareas capable of improvement.improvement. The Governance Committee also uses evaluation feedback in assessingannual Board evaluation includes an assessment of, among other things, whether the Board isBoard and its committees have the necessary diversity of optimum sizeskills, backgrounds and to identify skills and qualifications to prioritize in board recruitment.experiences to meet Occidental’s needs. The Governance CommitteeGovernance Committee annually considersconsiders the formatformat of its evaluation processesits evaluation processes, which, in recent years, have variouslyrecent years, have intentionally included anonymous questionnaires, one-on-one director interviews,different formats, such as questionnaires, individual director interviews and the use of a third-party facilitator.third-party facilitator. The 2017 board evaluation process2021 Board evaluation process is summarized below.summa rized below.
| DETERMINE THE PROCESS | CONDUCT EVALUATIONS | |
| In 2021, the Governance Committee recommended, and the Board approved, Board evaluations through the use of: (i) written questionnaires, (ii) a skills matrix and (iii) individual director interviews. This process was intended to encourage feedback from directors to promote productive discussions. | The Board and committee questionnaires solicited feedback related to committee and board effectiveness and performance; agenda topics and materials; skills; leadership; and, at the Board level, matters related to strategy. The questionnaires also included open-ended questions that prompted each director to reflect and comment on his or her own individual performance and contributions to the Board. The Chair of the Governance Committee interviewed each director to discuss his or her questionnaire responses and to solicit additional feedback. | |
| TAKE RESPONSIVE ACTION | ANALYZE THE RESULTS | |
| As part of its analysis of the evaluation results, the Board and management determined appropriate responsive actions to be implemented over the next year that are intended to address areas that were identified as capable of improvement. | In late 2021, the aggregated results of each questionnaire andfeedback from the director interviews was reviewed and discussed at a meeting of the Governance Committee. Each committeereviewed its individual results, and the Chair of the GovernanceCommittee led the Board in a discussion of the overall findings at a meeting of the full Board. |
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Corporate Governance
DirectorDirector Selection and RecruitmentRecruitment
Pursuant to the Board’s Nominating Policy, the Governance Committee considers director candidates recommended by shareholders as discussed further on page 87. In recent years,recent years, the BoardBoard has identified director candidates throughdirector candidates through the use of independent searchsearch firms, third-party recommendations,third-party recommendations and the recommendationsrecommendations of directorsdirectors and executive officers. Additionally, it is the policy of the Governance Committee to consider director candidates recommended by stockholders pursuant to the Nominating Committee Policy, discussed further on page 66. Forexecutive officers. For a discussion of the factorsfactors that the Governance Committee considersGovernance Committee considers in recommending candidates forrecommending candidates for election toto the Board,Board, see “ProposalProposal 1: Election of DirectorsDirectors – Director NominationsDirector Nominations” ” on page 9.14.
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Proxy Access for Shareholder-Nominated Director Candidates
Occidental’s by-lawsOccidental’s By-laws permit a groupgroup of up toto 20 stockholders, collectively owningshareholders, collectively owning 3% or moremore of Occidental’s outstandingOccidental’s outstanding common stockstock continuously forfor at least three years, to nominatethree years, to nominate and includehave included in Occidental’s proxy materials directorsOccidental’s proxy materials, director nominees constituting up toto 20% of the Board,Board, but not less than two directors, providedtwo directors, provided that the stockholder(s)shareholder(s) and the nominee(s)nominee(s) meet the requirementsrequirements of Occidental’s by-laws. For more informationOccidental’s By-laws. For more information on proxyproxy access and other procedures to recommend candidates to Occidental’s Board of Directors,procedures to recommend candidates to the Board, see “Nominations for Directors for Term Expiring in 2019Director Nominations for the 2023 Annual Meeting” ” beginning on page 66.87.
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BoardBoard of DirectorsDirectors and its Committees
its Committees
Occidental is governedgoverned by its Board of Directors,its Board, which is led by an Independentindependent Chairman, and its four committees,its six committees, composed entirelyentirely of independent directors.directors. The structurestructure of the BoardBoard and the responsibilitiesresponsibilities of its committees areits committees are described in moremore detail below.below.
Independent Board Leadership Structure
2018 Notice of Annual Meeting and Proxy Statement 18
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Occidental’s by-laws provide forOccidental’s By-laws provide for the Board toBoard to annually elect one of itsits independent directors todirectors to be Chairman of the Board. In 2017,Board. Mr. Chazen has served as Chairman of the Board elected Mr. Batchelder to serve in that position.Board since March 2020. The Chairman of the Board presidesBoard presides at BoardBoard meetings and meetings of stockholdersshareholders and his responsibilities/her responsibilities include, among other things:
►Call meetings of the independent directors and chair executive sessions of the Board at which no members of management are present; |
►Approve the agendas for Board and committee meetings; |
►Propose a schedule of Board meetings and the information to be provided by management for Board consideration; |
►Recommend the retention of consultants who report directly to the Board; |
►Assist in assuring compliance with the Corporate Governance Policies and to recommend revisions to the policies; |
►Evaluate, along with the members of the |
►Consult with other Board members as to recommendations on the membership and chairpersons of the Board committees and discuss recommendations with the |
►Communicate to the CEO the views of the independent directors and the Board committees with respect to objectives set for management by the |
►Serve as a liaison between the Board and Occidental’s | ||
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Corporate Governance
Occidental’s By-laws provide that the Board may also elect a Vice Chairman from among the independent directors to perform the duties of the Chairman in the absence or disability of the Chairman. Mr. Moore has served as Vice Chairman of the Board since May 2019.
Board Committees
The committees of the Board are composed entirely of independent directors. The primary responsibilities of the committees are described below. From time to time, the Board of Directors delegates additional duties to the committees. In addition, in 2021, the Board’s Advisory Committee met from time to time with Occidental’s management to provide additional input with respect to Occidental’s business and operations.
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The committees of the Board are composed entirely of independent directors. The primary responsibilities of the committees are described below. From time to time, the Board of Directors delegates additional duties to the committees.
MEMBERS
Andrew Gould
Robert M. Shearer
The Audit Committee Report with respect to Occidental’s financial statements is on page 75. | PRIMA ►
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Occidental Petroleum Corporation 19
AL, HEA TH AND AFE Y COMMI |
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MEMBERS: And William R. Klesse Margarita Paláu-Hernández Robert M. Shearer
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Corporate Governance
| CORPORATE GOVERNANCE AND NOMINATING COMMITTEE | |||
MEMBERS: Carlos M. Gutierrez (Chair) Jack B. Moore Avedick B. Poladian
| PRIMARY RESPONSIBILITIES: ► ►Review and ►Review and approve related party transactions |
►Evaluate and make recommendations to the Board regarding the compensation and benefits of non-employee directors | |
TION COMMI TEE | ||
MEMBERS: Jack B. Moo William R. Klesse Mar
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►Oversee the assessment of risks related to Occidental’s compensation policies and programs ►Administer Occidental’s equity-based incentive compensation plans and periodically
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| SUSTAINABILITY AND SHAREHOLDER ENGAGEMENT COMMITTEE | |||
MEMBERS: Robert M. Shearer (Chair) Andrew Gould Carlos M. Gutierrez MEETINGS IN 2021:4 | PRIMARY RESPONSIBILITIES: ►Review and oversee Occidental’s external reporting on ESG and sustainability matters, including climate-related risks and opportunities ►Review and oversee the company’s social responsibility programs, policies and practices, including the Human Rights Policy, and oversee associated external reporting ►Oversee Occidental’s shareholder engagement program ►Review and monitor climate-related public policy trends and related regulatory matters ►Review shareholder proposals related to matters overseen by the committee ►Oversee Occidental’s Political Contributions Policy and review Occidental’s political activities and expenditures ►Review and oversee the Charitable Contributions and Matching Gift Program | ||
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Corporate Governance
Other Governance MattersGovernance Matters
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Director Education
Directors are providedDirectors are provided with continuing education, including business-specific learning opportunities through site visitsopportunities through site visits and briefing sessions led by internal expertsinternal experts or third partiesthird parties on topicstopics that are relevant toare relevant to Occidental. In 2017, thisFor example, Board briefings on climate risks and opportunities in 2021 included regular reporting on Occidental’s climate-related performance, updates from the OLCV team on Occidental’s low-carbon strategy and, at the Board’s dedicated strategy session in September 2021, a third-party briefingpresentation by Dr. Julio Friedmann of Columbia University’s Center on the outlook of the oilGlobal Energy Policy on CO2removal, with an emphasis on CCUS and gas industry under various potential future scenarios; cyber security updates;DAC, and the use of immersive, 3-D technology to demonstrate recent innovations in the oilfield.
2018 Notice of Annual Meeting and Proxy Statement 20
Directors areenergy transition. Directors are also encouraged to attendencouraged to attend additional continuing education programsprograms designed toto enhance the performanceperformance and competenciescompetencies of individual directorsdirectors and the Board of Directors. In 2017, directors participated in various corporate director and compliance programs held by universities and corporate director, governance and investor organizations, including the NYSE and the National Association of Corporate Directors, as attendees Board.
Director as presenters.
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Attendance
The BoardBoard of DirectorsDirectors held sevenseven meetings in 2017. All2021, one of which was principally devoted to a strategic review session. Each of the directors attended every regularly scheduled meetingdirectors attended at least 90% of the Board in 2017, including the 2017 Annual Meetingaggregate number of Stockholders, and each director attended at least 75%meetings of the total numberBoard and of Board and Board committee meetingsthe Board committees on which he or she served. Attendanceserved and which were held during the period that each director served. All of the directors then serving on the Board attended the 2021 Annual Meeting of Shareholders. Attendance at the Annual Meeting of StockholdersShareholders is expectedexpected of directorsdirectors as if it werewere a regularregular meeting of the Board.Board.
Executive Sessions of the Independent Directors
The independent directors regularly meet in executive sessions at which no members of management are present. The independent directors held three executive sessions in 2021. The Board’s Independent Chairman chaired the executive sessions.
Director Commitments
Under Occidental’s corporate governance policies, directors must limit service on other public company boards to a reasonable number that would not conflict with his or her responsibilities as a director of Occidental. In recent years, some investors and proxy advisors have instituted ���bright-line” proxy voting policies on the number of outside public company boards upon which a director may serve. The Board recognizes investors’ concerns that highly sought-after directors could lack the time and attention to adequately perform their duties and responsibilities, and the Governance Committee rigorously evaluates each director’s performance and commitment to assess his or her continued effectiveness on Occidental’s Board.
Stephen I. Chazen, the chief executive officer and chairman of Magnolia Oil & Gas Corporation, has served on the board of directors of The Williams Companies, Inc. (Williams) since re-joining our Board in 2020. As announced by Williams in 2021, Mr. Chazen’s final term on the Williams board will end at Williams’ 2022 annual meeting in April. With this reduction in Mr. Chazen’s other public board commitments, which will now solely consist of Mr. Chazen’s service on the Magnolia Oil & Gas board, the Governance Committee and the Board considered the facts and circumstances of Mr. Chazen’s role, including the significant time and resources Mr. Chazen regularly dedicates to Occidental, his experience as a former CEOof Occidental, his broader industry knowledge and the nature of his outside commitments, and concluded that Mr. Chazen’s outside service does not conflict with his responsibilities at Occidental. The Board firmly believes that Mr. Chazen will continue to provide Occidental with the necessary time and attention as well as valuable insight, and it has therefore nominated Mr. Chazen to continue his service on the Board. Likewise, the Board has considered the outside public board service of each other director nominee and believes that each director nominee will be able to provide Occidental with thenecessary time and attention.
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The independent directors regularly meet in executive sessions at which no membersTable of management are present. The independent directors held five executive sessions in 2017. The Board’s Independent Chairman, Mr. Batchelder, chaired the executive sessions in 2017.Contents
Corporate Governance
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Related Party Transactions
The Board’s role in risk oversight recognizes the multifaceted nature of risk management. It is a control and compliance function, but it also involves strategic considerations in normal business decision-making. It covers legal and regulatory matters; finance; compensation; security; cybersecurity; and climate, environmental, health and safety concerns.
The Board has empowered its committees with risk oversight responsibilities. Each committee is integral to the control and compliance aspects of risk oversight by the Board. Each committee meets regularly with management to review, as appropriate, compliance with existing policies and procedures and to discuss changes or improvements that may be required or desirable. Every committee met at least six times in 2017. The frequency of committee meetings ensures that each committee has adequate time for in-depth review and discussion of all matters associated with each committee’s area of responsibility. Each committee makes regular reports to the full Board, sometimes without the Chief Executive Officer present, to apprise the Board of the committee’s discussion of issues and findings, as well as to make recommendations of appropriate changes or improvements.
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Pursuant to Occidental’sPursuant to Occidental’s Conflict of Interest PolicyInterest Policy and Code of Business Conduct, each directordirector and executiveexecutive officer has an obligation to avoid any activity, agreement,to avoid any activity, agreement, business investmentinvestment or interest,interest, or other situation that could be construed either as divergent todivergent from or in competition with Occidental’s interestOccidental’s interest or as an interferenceinterference with such person’sperson’s primary duty to serveto serve Occidental, unless prior written approvalwritten approval has been grantedgranted by the Audit Committee.Audit Committee. All potential conflictspotential conflicts of interestinterest must be reported toreported to a designateddesignated compliance officer.officer. A summary of the Conflict of Interest PolicyInterest Policy is included in Occidental’sOccidental’s Code of Business Conduct which can be foundfound at www.oxy.com/Investors/Governance.www.oxy.com/Investors/Governance.
Pursuant to Occidental’s writtenPursuant to Occidental’s written policy on related party transactions,related party transactions, the Governance Committee reviews relationshipsGovernance Committee reviews relationships and transactionstransactions in which Occidental and its directors, executive officers,its directors, executive officers, or their immediate family members participateimmediate family members participate if the amount involvedinvolved exceeds $120,000. To$120,000. To help identify related party transactions,related party transactions, each directordirector and executiveexecutive officer must completecomplete an annual questionnairequestionnaire that requires disclosurerequires disclosure of any transaction betweenany transaction between Occidental and the director director executiveor executive officer or anyany of his or her affiliatesaffiliates or immediate family members. Additionally,immediate family members. Additionally, the accounting department reviews Occidental’sdepartment reviews Occidental’s financial records for paymentsrecords for payments made to,to, or received from, related partiesreceived from, related parties and the entities with which the related parties are affiliated,related parties are affiliated, and reports anyreports any identified transactions totransactions to the legal department.department. The Governance Committee reviewsGovernance Committee reviews and approves, ratifiesapproves, ratifies or rejectsrejects identified related party transactions.related party transactions. In approving, ratifyingapproving, ratifying or rejectingrejecting a related party transaction,related party transaction, the Governance Committee considersGovernance Committee considers such informationinformation as it deems appropriate to determineappropriate to determine whether the transactiontransaction is on reasonablereasonable and competitive termscompetitive terms and is fair tofair to Occidental and its stockholders.its shareholders.
Risk Oversight
Pursuant toRisk oversight occurs at both the policy,Board and committee level. The Board is responsible for overseeing Occidental’s policies and procedures with respect to risk management, and it has empowered its committees with oversight of specific, material risks tailored to each committee’s area of focus. Each of the Governance Committee identified one transactionBoard’s committees is integral to the control and compliance aspects of risk oversight by the Board. Each committee meets regularly with management to review, as appropriate, compliance with existing policies and procedures and to discuss changes or improvements that qualifiedmay be required or desirable. The frequency of committee meetings is intended to allow each committee adequate time for in-depth review and discussion of matters associated with its areas of responsibility. Each committee regularly reports to the Board regarding the committee’s discussion of issues and findings, as a related party transaction. Brent Vangolen, the sonwell as to make recommendations of Mr. Glenn Vangolen, an executive officer, is employed by Occidental as a senior production engineer for the domestic oil and gas segment. His total compensation for 2017 (consisting of his annual base salary, annual bonus and stock-based compensation) was less than $200,000. He also participated in the general welfare and benefit plans of Occidental. Mr. Vangolen did not participate in the hiring of his son and does not participate in performance evaluationsappropriate changes or compensation decisions regarding his son. Mr. Brent Vangolen’s compensation and benefits are comparable with similarly situated employees of Occidental.improvements.
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Corporate Governance
 | BOARD OVERSIGHT | ||
| As part of its overall responsibility for overseeing Occidental’s policies and procedures with | |||
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| COMMITTEES | |||
AUDIT ► Assists the Board in monitoring the company’s financial statements, compliance with legal and regulatory requirements, the qualifications and independence of the independent auditor, the independent auditor’s performance, and Occidental’s internal audit function ► Oversees information technology security programs, including cyber security ► Oversees Occidental’s Enterprise Risk Management (ERM) process and Code of Business Conduct | CORPORATE GOVERNANCE AND NOMINATING ► Oversees the Corporate Governance Policies, Board composition and refreshment, Board committee leadership and membership and Board, committee and individual performance evaluations ► Administers the company’s Related Party Transactions Policy | ENVIRONMENTAL, HEALTH AND SAFETY ► Oversees compliance with applicable environmental, health and safety laws and regulations, results of internal compliance reviews and remediation projects | |
EXECUTIVE COMPENSATION ► Oversees the risk assessment related to the company’s compensation policies and programs applicable to executive officers and other employees, including the determination of whether any such policies and programs encourage unnecessary or excessive risk taking | SUSTAINABILITY AND SHAREHOLDER ENGAGEMENT ► Oversees the external reporting on ESG and sustainability matters, including climate-related risks and opportunities ► Oversees the company’s social responsibility programs, policies and practices, including the Human Rights Policy ► Oversees Occidental’s Political Contributions Policy and Charitable Contributions and Matching Gift Program ► Oversees the shareholder engagement program | ADVISORY ► Established to provide more regular Board oversight and input to Occidental’s management with respect to Occidental’s business and operations | |
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| ROLE OF MANAGEMENT | |
| Senior leadership, including the ERM Council (a group of senior executives responsible for identifying, assessing, monitoring, managing and reporting enterprise risks), manages risk. Occidental maintains internal processes and controls to facilitate risk identification and management. As part of Occidental’s governance and risk management processes, senior management regularly reports to the Board on financial, operational, human capital, cyber security, environmental, health, safety and sustainability matters. | |
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StockholdersTable of Contents
Corporate Governance
 | OVERSIGHT OF COVID-19 | |
| Over the past two years, senior management and the Human Resources department have actively monitored federal, state and local guidance and public health data and implemented proactive measures to reduce the risk of COVID-19 transmission across the company’s global operations. Senior management discusses these measures and the effect of COVID-19 on our workforce with the Environmental, Health and Safety Committee on at least a quarterly basis. | ||
 | OVERSIGHT OF CYBER SECURITY | |
| The Board recognizes the importance of monitoring cyber risk. At the management level, the company has a dedicated Chief Information Officer (CIO) who, along with his team, is responsible for the Information Technology (IT) organization and the strategy and deployment of IT across Occidental’s worldwide oil and gas, midstream, chemicals and corporate operations. The CIO briefs the Audit Committee on a quarterly basis on the cyber security program, events and the state of cyber security. In addition to the above, Occidental’s cyber security practices are audited as part of our standard general IT controls, and the effectiveness of Occidental’s cyber security program is audited by an independent third party against the National Institute of Standards and Technology (NIST) Cybersecurity Framework. Industrial Control Systems (ICS) Cybersecurity has also been incorporated into Occidental’s ERM program. | ||
 | OVERSIGHT OF HUMAN CAPITAL AND CULTURE | |
| As part of our commitment to diversity, inclusion and belonging, we conducted a robust survey across our organization in 2020. The results were reviewed with our Board and became a basis for our enhanced communications with our workforce about the company’s business strategy, employee development and core values. In 2021, senior leadership presented to the Sustainability and Shareholder Engagement Committee on the company’s succession management, workforce planning, talent acquisition and development, DIB, performance management and succession management. | ||
 | OVERSIGHT OF SUSTAINABILITY | |
| The Board oversees environmental, health, safety and sustainability matters, including those with respect to climate change, as an integral part of its oversight of Occidental’s strategy and key risks. These matters are inherent to our strategic plan and, accordingly, incorporated into regular Board meetings as well as the Board’s annual in-depth strategic review session. In addition, the Board’s committee structure is designed to provide the Board and its committees with the appropriate oversight of relevant sustainability issues, and the Sustainability and Shareholder Engagement Committee provides close oversight of key sustainability and social responsibility issues. It reviews and monitors climate-related public policy trends and related regulatory matters and oversees Occidental’s social responsibility programs, policies and practices, including the Human Rights Policy. It also oversees Occidental’s external reporting on ESG and sustainability matters, including climate-related risks and opportunities. The Sustainability and Shareholder Engagement Committee reports to the full Board on its activities and findings. | ||
Shareholders and other interested parties may communicate with any director by sending a letter to the director’s attention in care of Occidental’s Corporate Secretary, Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046. The Corporate Secretary opens, logs and forwards all such correspondence (other than advertisements or other solicitations) to directors unless a director has requested that the Corporate Secretary to forward correspondence unopened.
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Occidental Petroleum Corporation 21
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (CD&A) describesOccidental is submitting this proposal to its shareholders for an advisory vote to approve the material elements, objectives and principlescompensation of Occidental’s 2017 executive compensation program for its named executive officers recent compensation decisions andas disclosed in this proxy statement pursuant to Section 14A of the factorsExchange Act. At our 2017 annual meeting, the Executive Compensation Committee (the Compensation Committee) considered in making those decisions.
Theshareholders approved, on an advisory basis, a frequency of every year for casting advisory votes to approve named executive officers for 2017 are:
Highlights of Executive Compensation Program Featuresofficer compensation. The next Say-on-Pay vote is expected to occur at our 2023 annual meeting.
The 2017 executive compensation program for the named executive officers includes many best-practice features that are intended to enhance the alignment of compensation with the interests of Occidental’s stockholders.
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2018 Notice of Annual Meeting and Proxy Statement 22
Say-on-Pay Results and Stockholder Engagement
At the 2017 Annual Meeting, Occidental’s advisory vote to approve executive compensation received support from approximately 83% of the total votes cast. This level of support represented a decline from recent years and the Compensation Committee sought input from Occidental’s stockholders through the company’s stockholder engagement program to gain insight into the results. A prominent concern raised by some of Occidental’s stockholders was that the 2016 long-term incentive program did not include a performance metric tied to return on capital. Some stockholders questioned whether the de-emphasis of returns in the long-term incentive program reflected a shift in Occidental’s business strategy, which was, and remains, very returns-focused. During earnings presentations and in meetings with stockholders, Occidental’s senior management team emphasized their belief that recent operational and technological achievements, and actions to reduce costs and optimize the company’s asset portfolio, have positioned the company for industry-leading returns.
As a commitment to Occidental’s business strategy and in light of the views expressed by Occidental’s stockholders, the Compensation Committee determined that the addition of a second returns-based metric in the long-term incentive program, cash return on capital employed (CROCE), would ultimately enhance pay-for-performance by strengthening the link between executive pay and Occidental’s strategic business goals, and demonstrate responsiveness to the concerns of Occidental’s stockholders.shareholders. The 2018 long-term incentive program for the executive officers includes a performance stock unit award based on Occidental’s CROCE over a three-year period. At grant, the CROCE award comprised 25% of Ms. Hollub’s 2018 long-term incentive award package and 20% for the other executive officers. Further details regarding the 2018 long-term incentive award program will be provided in Occidental’s 2019 proxy statement.
Recent Executive Compensation Program Changes
The Compensation Committee regularly evaluates the compensation program for the named executive officers to consider the views of Occidental’s stockholders, peer company and market pay practices and emerging compensation trends and best practices. Several of the recent changes to the compensation program for the named executive officers were the result of feedback from Occidental’s stockholders. The Compensation Committee regularly receives feedback on the executive compensation program through Occidental’s spring and fall stockholder engagement programs.
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In addition, the Compensation Committee added threshold performance goals to the 2017 restricted stock unit (RSU) awardDiscussion and the company performance portion of the 2017 Annual Cash Incentive award, which were intended to qualify the awards as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code (the Code) as in effect at the time the awards were granted. For more information, see “Section 162(m) Performance Pool”Analysis (CD&A) section beginning on page 28.
Occidental Petroleum Corporation 23
Overview36 of the 2017 Compensation Program
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Executive Compensation Program Objectives
this proxy statement.
The Compensation Committee strives to maintain a compensation program that will attract, retain and motivate outstanding executives by providing incentives to reward them for superior performance that supports Occidental’s long-term strategic objectives whether in an up- or down-cycle commodity price environment, and is competitive with industry practices. The executive compensation program is intended to:
| ► Align with |
| Preserve performance accountability in both strong and weak commodity price environments; |
| ► Build long-term share ownership; |
| ► Provide a consistent retention incentive; |
| ► Be straightforward and transparent for the benefit of executives and |
| ► Match or exceed prevailing governance standards for performance-based compensation. |
The Board recommends that shareholders support the following resolution for the reasons described in the CD&A:
RESOLVED, that the shareholders approve, on an advisory basis, the compensation of Occidental’s named executive officers for 2021, as set forth in the CD&A, Summary Compensation Table and the other tables and narrative disclosures regarding named executive officer compensation set forth in this proxy statement.
2018 NoticeA majority of the shares of common stock present in person or by proxy at the 2022 Annual Meeting and Proxy Statement 24
Elementsvote on this proposal must vote “FOR” the proposal to approve it. Your broker may not vote your shares on this proposal unless you give voting instructions. Abstentions have the same effect as votes cast “AGAINST” the proposal. Broker non-votes have no effect on the vote. As in past years, your vote will not directly affect or otherwise limit or enhance any existing compensation or award arrangement of any of our named executive officers, but the outcome of the 2017 Compensation Program
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The Compensation Committee believes that base salary should reward executives on a market-competitive basis for consistent performance of job requirements and achievement of short-term goals, which, over time, contribute to longterm growth of stockholder value. Salaries are reviewedSay-on-Pay vote will be taken into account by the Compensation Committee annuallyin making future compensation decisions.
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Compensation Discussion and as circumstances warrant. In determining base salary levels,Analysis
This Compensation Discussion and Analysis (CD&A) describes the material elements, objectives and principles of Occidental’s 2021 executive compensation program for its named executive officers, recent compensation decisions and the factors the Compensation Committee reviews compensation surveys; publicly available peer company data; internal pay equity; individual responsibilities;considered in making those decisions. The following officers are our named executive officers (NEOs) for 2021:
| Name | Position | |
 | Vicki Hollub | President and Chief Executive Officer |
 | Robert L. Peterson | Senior Vice President and Chief Financial Officer |
 | Marcia E. Backus | Senior Vice President, General Counsel and Chief Compliance Officer |
 | Kenneth Dillon | Senior Vice President |
 | Richard A. Jackson | Senior Vice President |
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Compensation Discussion and performance assessments. Base salary and “other” annual compensation (perquisites and certain other employee benefits) represented, on average, less than 15%Analysis
In 2021, the Compensation Committee remained mindful of the 2017challenges posed by the COVID-19 pandemic, including on Occidental’s workforce, and continued to monitor the emergence and spread of new variants of the virus and how that impacted the demand for Occidental’s products and its share performance.
Commitment to Pay-for-Performance
Occidental remains committed to the pay-for-performance philosophy that underpins our compensation packagesprogram. A substantial portion of named executive officer compensation is performance-based. As a result, the realizable values of the named executive officers. officers’ compensation awards are impacted by Occidental’s performance, and ultimate pay opportunities are strongly aligned with the experience of our shareholders.
For information regarding salary decisions for the named executive officers in 2017, see “Individual Compensation Considerations” beginning on page 30.
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The Annual Cash Incentive award is intended to motivate executives to achieve superior company and individual performance over a one-year period. In the first quarter,2021, the Compensation Committee approves individual target award amountsdetermined to maintain the level of at-risk pay for each executive officer based on a review of compensation surveys; publicly available peer company data; the executive’s prioryear award value; retention considerations; the balance of short-Ms. Hollub at 90% and long-term pay; internal pay equity; and each executive’s ability to influence Occidental’s performance for the year. Potential payouts under the Annual Cash Incentive award range from 0% to 200% of the target award amount, based on actual company and individual performance. The amounts earned under the Annual Cash Incentive award for 2017, which were paid in the first quarter of 2018, are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 37.
Setting the Annual Cash Incentive.The Compensation Committee annually reviews the metrics and targets underlying the Annual Cash Incentive award, and their relative weightings, with an aim to incentivize the named executive officers to excel in areas that are aligned with Occidental’s business objectives. In the first quarter of 2017, the Compensation Committee approved company performance metrics related to Occidental’s strategic goals and operational, financial, and safety/environmental performance. With respect to these metrics, the Compensation Committee set target performance goals that it believed were rigorous based on Occidental’s detailed capital program and business plan; projections from the strategic planning team and business unit heads; prior-year results; and third-party forecasts relating to future market conditions and other external market factors.
Weighting the Elements.The Compensation Committee determined that the company performance metrics would comprise 80% of Ms. Hollub’s target Annual Cash Incentive award, and 60% for the other named executive officers withat an average of 84%. The company also retained the remainder of the Annual Cash Incentivesame award opportunity linked to an assessment of the performance of the individual executive.vehicles and allocation proportions, which track our stock price and business performance. The Compensation Committee determinedwill continue to weightthoughtfully oversee the effectiveness of Occidental’s executive compensation structure to ensure CEO and executive compensation is aligned with company performance and shareholder experience.
| CEO COMPENSATION | AVERAGE OTHER NEO COMPENSATION |
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Responsiveness to Ongoing Shareholder Engagement
Throughout 2021 and the beginning of 2022, we continued our extensive shareholder outreach program and specifically solicited feedback on our executive compensation program. A broad group of Occidental management participated in the outreach program through a largerseries of virtual meetings and conference calls, with active independent director participation either directly on the calls or through oversight of the shareholder engagement program. Director participants in meetings with shareholders included members of the Sustainability and Shareholder Engagement Committee as well as the Chair of the Compensation Committee.
Based on our conversations with shareholders and the support of approximately 97% of the total votes cast in our 2021 advisory vote to approve NEO compensation (Say-on-Pay vote), we believe that shareholders generally endorse the current executive compensation program, including the increased weighting of sustainability metrics for the company performance portion of Ms. Hollub’s Annual Cash Incentivethe 2021 annual cash incentive (ACI) award opportunity toward keyprogram, and recognize that it is functioning as intended. The Compensation Committee will continue to engage with shareholders on the design of the executive compensation program and work to promote alignment of executive officer pay with shareholder interests.
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Compensation Discussion and Analysis
Looking ahead to 2022, given Occidental’s commitment to be a part of the climate solution and the importance of the energy transition to shareholders, the Compensation Committee decided to maintain the weighting of sustainability metrics at 30% for the company performance metrics because, as Chief Executive Officer, her leadership directly affects all aspectsportion of the company��s performance. The relative weightings of the Annual Cash Incentive award elements are shown below.
TARGET ANNUAL CASH INCENTIVE AWARD – ELEMENT WEIGHTINGS
Occidental Petroleum Corporation 25
2017 Annual Cash Incentive Award – Company Performance Portion
| WHAT WE HEARD |
► Increase the weighting of sustainability metrics for incentive compensation to better align with the company’s net-zero strategy and support for such increase ► Maintain strong pay-for-performance alignment ► Focus on cost-effective operations | ► Increased sustainability weighting to 30% of the company performance portion of the ► Included targets for carbon ventures and reduction projects (Scope 3) and emissions reduction efforts (Scope 1 and 2) to advance Occidental’s net-zero strategy ► Maintained sustainability metric and 30% weighting for the ► Continued mix of long-term incentive vehicles ► Continued use of returns-based CROCE award ► Deemphasized production growth metrics to focus on cost- effective operations and our ability to operate profitably within a wide range of commodity price environments |
| Climate goals comprise 30% of company performance | Long-term incentive mix remains primarily performance-based | Annual financial performance focused on |
Business Highlights
In 2021, Occidental’s strong operational performance drove its robust financial performance. From an operational perspective, Occidental prioritized sustaining production in line with its 2020 fourth quarter rate by investing $2.9 billion in capital and maintaining a majority of the cost savings achieved in 2020. With a focus on operational efficiencies, Occidental adhered to our 2021 capital budget, exceeded our original production guidance and set new operational records and efficiency benchmarks. This focus coupled with the increase in commodity prices, which resulted in higher cash flow, allowed Occidental to improve its financial position.
Occidental used its excess cash flow generated during 2021, as well as divestiture proceeds from the completion of its large-scale divestiture program, to continue to improve balance sheet strength through debt reduction, among other things. In 2021, Occidental reduced total borrowings at face value of over $6.7 billion and retired interest rate swaps with a notional value of $750 million. This has set Occidental on a path toward further debt reduction and increasing shareholder value in 2022.
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Compensation Discussion and Analysis
Compensation Program Actions
The Compensation Committee took decisive actions in 2021 to respond to shareholder feedback and maintain strong pay-for- performance alignment, while also recognizing that competitive pay is necessary to attract and retain top executive talent. As discussed above, in response to shareholder feedback, the Compensation Committee (i) increased the weighting of sustainability metrics for the company performance portion of the ACI award to 30% to more closely align with the company’s net-zero strategy and (ii) maintained a high level of at-risk pay, coupled with the continued use of returns-focused metrics, to support the compensation program’s strong pay- for-performance philosophy.
In addition, the Compensation Committee reviewed named executive officer compensation, including base salaries, to ensure competitiveness with peer companies while maintaining alignment with shareholder experiences. As a result, Ms. Hollub’s base salary was partially restored to $1,000,000, reflecting an approximate 26% decrease from pre-COVID levels.
Objectives of the Executive Compensation Program
The Compensation Committee strives to maintain a compensation program that will attract, retain and motivate outstanding executives by providing incentives to reward them for superior performance that supports Occidental’s long-term strategic objectives and is competitive with industry practices. The executive compensation program is intended to:
| ► Align with shareholder interests |
| ► Preserve performance accountability in both strong and weak commodity price environments |
| ► Build long-term share ownership |
| ► Provide a consistent retention incentive |
| ► Be straightforward and transparent for the benefit of executives and shareholders |
| ► Match or exceed prevailing governance standards for performance-based compensation |
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Compensation Discussion and Analysis
Governance Features of the Executive Compensation Program
The 2021 executive compensation program for the NEOs includes many best-practice features that are intended to enhance the alignment of compensation with the interests of Occidental’s shareholders.
WHAT WE DO
| ✔ Pay for Performance.A substantial majority of NEO compensation is performance-based. The Compensation Committee reviews the ✔ Act on Shareholder Feedback.Shareholder feedback influences the executive compensation program and contributed to the Compensation Committee’s decisions to maintain total CEO target compensation for 2021 at a 29% reduction from pre-COVID levels and increase the weighting of sustainability metrics to 30% for the company performance portion of the ACI award opportunity. The favorable response from shareholders on the latter informed the Compensation Committee’s decision to maintain the sustainability metric as well as the weighting for the 2022 ACI award. ✔ Clawback in the Event of Misconduct.The Compensation Committee has the authority to claw back ACI awards and long-term incentive awards for violations of Occidental’s Code of Business Conduct and related policies. ✔ Emphasize Stock Ownership.Cash Return on Capital Employed (CROCE) and Total Shareholder Return (TSR) awards are payable in shares of common stock and the net shares received upon each Restricted Stock Unit (RSU) award vesting are subject to a two-year holding period. In addition, the named executive officers (as well as other officers) are subject to meaningful stock ownership guidelines, ranging from three to six times the officer’s annual base salary, and a holding requirement until such guidelines are met. ✔ Monitor Compensation Program for Risk.The executive compensation program includes multiple features that are intended to appropriately control motivations for excessive risk-taking. The Compensation Committee conducts an annual assessment of our executive compensation program to identify and minimize, as appropriate, any compensation arrangements that may encourage excessive risk-taking. ✔ Use Double-Trigger Equity Vesting for Equity Awards.Pursuant to the Amended and Restated 2015 Long-Term Incentive Plan (2015 LTIP), equity awards vest in the event of a change in control only if there is also a qualifying termination of employment. ✔ Use Relative and Absolute Performance Measures for Equity Awards.Performance equity is earned based on both relative shareholder returns and absolute financial returns, with TSR awards capped if Occidental’s absolute TSR is negative. | |
WHAT WE DON’T DO X No Dividend Equivalents on Unvested Performance Awards.Under the 2015 LTIP, dividends and dividend equivalent rights are subject to the same performance goals as the underlying award and will not be paid until the performance award has vested and becomes earned (except in the case of certain retention awards). X No Hedging or Derivative Transactions.Occidental’s directors, executive officers and all other employees are not permitted to engage in transactions designed to hedge or offset the market value of Occidental’s equity securities. X No Golden Parachute Payments.Our golden parachute policy provides that, subject to certain exceptions, Occidental will not grant golden parachute benefits (as defined in the policy) to any executive officer which exceed 2.99 times his or her salary plus ACI award without shareholder approval. X No Repricing of Stock Options.Other than in connection with a corporate transaction involving Occidental, the 2015 LTIP does not permit the repricing of stock options or stock appreciation rights without shareholder approval. | ||
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Compensation Discussion and Analysis
Overview of the 2021 Executive Compensation Program
| Element | Purpose | Form of Payout | How Target Values are Determined | 2021 Determinations | |||||||
 | Base Salary | Provide a competitive level of fixed compensation. | Cash | The Compensation Committee reviews base salaries annually and as circumstances warrant. The Compensation Committee reviews compensation surveys, publicly available peer company data, internal pay equity, individual responsibilities and performance assessments with the intent to attract and retain highly talented executives. | In 2021, each of Mr. Peterson’s and Mr. Jackson’s base salaries were increased by $25,000 to $650,000 and Ms. Hollub’s base salary was partially restored to $1,000,000. There were no other changes to NEO base salaries. Salary decisions are described in more detail under “Individual Compensation Considerations” beginning on page 52. | ||||||
 | Annual Cash Incentive | Motivate executives to achieve superior performance over a one- year period. | Cash | The Compensation Committee annually reviews the objectives, metrics and targets underlying the ACI award, | The 2021 ACI award evaluated management’s performance against metrics related to Occidental’s total spend per barrel and sustainability performance and included a qualitative assessment of each officer’s individual contributions. The ACI is described in more detail under “Elements of the 2021 Executive Compensation Program – Annual Cash Incentive” beginning on page | ||||||
 | Performance Share Unit (PSU) Awards | Incentivize executives to sustain long-term performance. | Stock | The Compensation Committee annually reviews and determines a target long- term incentive award package for each NEO based on a review of compensation surveys, publicly available peer company data, the executive’s prior-year award value (as applicable), retention considerations, the balance of short-and long- term pay and internal pay equity. | Similar to 2020, the Compensation Committee continued using TSR and CROCE as the performance criteria for the PSU awards. The TSR award is an objective, external measure of Occidental’s effectiveness in translating our results into shareholder returns. The CROCE award incentivizes a high level of executive focus on capital efficiency and prudent capital allocation. The RSU award, which is subject to a two-year post-vesting holding period, aligns with Occidental’s absolute stock price performance and provides retention value. Lastly, the NQSOs generate high-level alignment with shareholders and reinforce the importance of price appreciation. Long-term incentive awards are weighted: 50% PSU (25% TSR and 25% CROCE); 25% RSU and 25% NQSOs. | ||||||
| RSU Awards | Provide a retention incentive that promotes sustained stock ownership and alignment with stock price performance. | Stock | |||||||||
| Non-Qualified Stock Options (NQSOs) | Reinforce the importance of stock price appreciation. | Stock | The majority of the long-term incentive award package for each NEO is performance- based. The Compensation Committee annually considers the performance criteria for PSU awards in light of Occidental’s ongoing business objectives. | The long-term incentive award program is described in more detail under “Elements of the 2021 Executive Compensation Program – Long-Term Incentive Award Program” beginning on page 48. The target value of the long- term incentive award package of each NEO is described under “Individual Compensation Considerations” beginning on page 52. | |||||||
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2018 Notice of Annual Meeting and Proxy Statement 26
Compensation Discussion and Analysis
Annual Cash Incentive Award – IndividualCompensation Program Emphasizes Performance Portion.The minority portion
A substantial majority of NEO compensation is dependent on performance.
90% of Ms. Hollub’s (and an average of 84% of the Annual Cash Incentive awardother NEOs’) 2021 target direct compensation opportunity for 2017 (20% for Ms. Hollub and 40% foris variable, or at risk. The ultimate value of at-risk compensation is dependent on company performance outcomes, the other named executive officers) was subject toresult of the Compensation Committee’s assessment of each executive officer’s achievement in certain keyindividual’s performance areas withinand Occidental’s stock price performance.
CEO TARGET DIRECT COMPENSATION MIX(1) - 90% VARIABLE/AT RISK
| (1) | Target direct compensation is composed of base salary, target ACI award opportunity, and the target value of long-term incentive awards. |
At the executive’s area of responsibility, as well as the executive’s response to unanticipated challenges during the year. The individual performance portion2021 Annual Meeting, Occidental’s Say-on-Pay vote received support from approximately 97% of the Annual Cash Incentive award links incentive compensation directly to the performancetotal votes cast. The Compensation Committee views this result as an endorsement by shareholders of the particular executive. In evaluating performance,design of the Compensation Committee considered the following performance areas:
For a detailed discussion ofcompany’s current executive compensation program. Through shareholder engagement, we have received positive feedback on the Compensation Committee’s considerations with respectswift actions following the onset of the COVID-19 pandemic to each named executive officer’s individual performancereduce NEO base salaries in 2020 and resulting payouts, please see “Individual Compensation Considerations” beginning on page 30.
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The majority of named executive officer compensation is determined by Occidental’s long-term performance. In 2017, the long-term incentive program consisted of a performance-based TSR award and a time-based RSU award, which are each payable solely in shares of common stock. Theits decision to not adjust long-term incentive awards are intended to provide incentivesgranted pre-COVID. Management has also received support from stakeholders on increasing the weighting of sustainability metrics for achieving results consistent with the goal of maximizing stockholder value and to retain and motivate Occidental’s executives. The Compensation Committee believes that long-term compensation should represent the largest portion of each executive officer’s total compensation package and that the levels of payout should reflect Occidental’s performance, on a relative and absolute basis. During the process of determining each named executive officer’s long-term incentive compensation package for 2017, the Compensation Committee evaluated many factors, including:
2017 Long-Term Incentive Program. The 2017 long-term incentive program consisted of a performance-based stock unit (PSU) award based on relative TSR, and a time-based RSU award, each payable solely in shares of common stock, with the majority of the target long-term incentive award opportunity weighted toward performance, as indicated below.
Total Shareholder Return (TSR) Award.The Compensation Committee believes that the comparison of Occidental’s three-year TSR to peer companies’ returns over that same period is an objective external measure of Occidental’s effectiveness in translating its results into stockholder returns. TSR is the change in price of a share of common stock plus reinvested dividends, over a specified period of time, and is an indicator of management’s achievement of long-term growth in stockholder value. Payout of the TSR award is based on Occidental’s three-year TSR as compared to the three-year TSR of the 11 performance peer companies identified on page 29. The TSR award is denominated in PSUs, each of which is equivalent to one share of common stock. The percentage of such number of PSUs that will be payable at the end of the three-year performance period, which began January 1, 2017 and ends December 31, 2019, will depend on Occidental’s relative TSR performance and Occidental’s absolute TSR performance. If Occidental’s absolute TSR is negative over the performance period, then, irrespective
Occidental Petroleum Corporation 27
of Occidental’s ranking within the peer group, the payout of the TSR award is capped at no more than target. A table illustrating the potential payouts based on relative and absolute TSR performance is set forth below:
The cap on payout of the TSR award in instances of negative TSR performance over the performance period is intended to reinforce the pay-for-performance nature of the compensation program. The TSR award comprised 70% and 55% of Ms. Hollub’s and the other named executive officers’ target long-term incentive award opportunity for 2017, respectively. Cumulative dividend equivalents will be paid in cash at the end of the three-year performance period and will be paid only on the number of PSUs earned. The TSR award was intended to satisfy the tax deductibility requirements of Section 162(m) as in effect at the time the award was granted. Forfeiture and change in control provisions applicable to the TSR award are discussed in more detail in the Potential Payments upon Termination or Change in Control table and the footnotes thereto, beginning on page 45.
Restricted Stock Unit (RSU) Award. The RSU award, which comprises the remainder of the 2017 long-term incentive package, vests ratably over three years with one-third vesting on each of February 28, 2018, 2019 and 2020, subject to continued employment. The RSU award is denominated in restricted stock units, each of which is equivalent to one share of common stock. Payment for a vested RSU award will be made solely in shares of common stock. The shares of stock ultimately received by the named executive officer pursuant to the RSU award are subject to a two-year holding period after the vest date and, after the expiration of the holding period, the named executive officer must continue to retain ownership of the shares until he or she satisfies the applicable stock ownership guidelines, as described on page 34. Prior to the certification of the achievement of the Section 162(m) performance condition, dividend equivalents were accumulated; thereafter, dividend equivalents are payable in cash at the time that dividends are paid on Occidental’s common stock. Forfeiture and change in control provisions applicable to the RSU award are discussed in more detail in the Potential Payments upon Termination or Change in Control table and the footnotes thereto, beginning on page 45.
2018 Long-Term Incentive Program Changes. In response to investor feedback, the Compensation Committee modified the long-term incentive program, beginning with 2018 awards, to link a portion of the long-term incentive award opportunity to Occidental’s CROCE performance over a three-year period. The addition of the CROCE award is intended to further align the executive compensation program with Occidental’s strategic business goals. At grant, the CROCE award comprised 25% of Ms. Hollub’s 2018 long-term incentive award package and 20% for the other executive officers. Further details regarding the 2018 long-term incentive award program will be provided in Occidental’s 2019 proxy statement.
Section 162(m) Performance Pool.In February 2017, the Compensation Committee established two independent threshold performance goals individually applicable to the company performance portion of the 2017 Annual Cash IncentiveACI award and setting associated short-term targets aligned with the 2017 RSU award: (a) achieving operating cash flow before working capital of $1.5 billion during 2017 (Performance Goal A),Paris Agreement to address carbon ventures and (b) achieving production volume of 540,000 BOE/day during 2017, subject to adjustment in certain circumstances for asset divestitures (Performance Goal B). If either Performance Goal A or Performance Goal B was met in 2017, then a Section 162(m) “pool” would be funded, up to a maximum of $18 million, to cover any potential payout of the company performance portion of the Annual Cash Incentive awardreduction projects (Scope 3 emissions) and the grant date fair value of the 2017 RSU awards. In February 2018, the Compensation Committee certified the attainment of Performance Goal Aemissions reduction efforts (Scope 1 and Performance Goal B, and the Section 162(m) pool was funded. For more information regarding Section 162(m), see“Additional Compensation Policies and Practices – Section 162(m) Considerations”on page 35.2 emissions).
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At our 2021 Annual Meeting, shareholders showed strong support for our executive compensation program with 97% of the votes cast approving our advisory resolution. |
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Compensation Discussion and Analysis
Participants in the Executive Compensation Decision-Making Process
Role of the Independent Compensation Committee.The Compensation Committee, comprisedcomposed of independent members of the Board, is responsible for annually reviewing and approving all aspects of the Chief Executive Officer’s compensation, as well as annually reviewing and approving the compensation of all other named executive officers. In performing these duties, the Compensation Committee obtains input, advice and information from senior management, members of Occidental’s Human Resources team and an independent compensation consultant, as further described below, throughout the year. The Compensation Committee also considers the views expressed by Occidental’s investors and stockholdershareholder advisory groups in making executive compensation decisions. The Compensation Committee uses publicly available data regarding the executive compensation practices of its compensation peer group (as defined below) as an additional tool but does not benchmark executive compensation to a specific percentile within the peer group.
 |  |  |  | |||
| JACK B. MOORE | WILLIAM R. KLESSE | MARGARITA PALÁU-HERNÁNDEZ | AVEDICK B. POLADIAN | |||
| Chair |
2018 Notice of Annual Meeting and Proxy Statement 28
Role of Senior Management.Ms. Hollub, as Chief Executive Officer, makes recommendations to the Compensation Committee regarding the compensation package for each of the other named executive officers to the Compensation Committee.officers. Ms. Hollub and the senior executives responsible forVice President of Human Resources are present for a portion of each of the Compensation Committee meetings, but no senior executive is present when decisions regarding his or her compensation isare discussed and made.determined. Only the Compensation Committee sets Ms. Hollub’s compensation package is set only by the Compensation Committee.package. Senior members of the Human Resources team and other members of senior management interact with the compensation consultant as necessary and prepare materials for each Compensation Committee meeting to assist the Compensation Committee in its consideration and administration of executive compensation programs, plans and policies.
Role of the Independent Compensation Consultant.In 2017,2021, the Compensation Committee engaged Meridian Compensation Partners, LLC (Meridian) as its compensation consultant to provide advice on various executive compensation matters. Meridian has served as the Compensation Committee’s compensation consultant since 2016. The Compensation Committee reviewed the independence of Meridian under SEC rules, the NYSE Listed Company Manual standards and Occidental’s Independent Compensation Consultant Policy and found Meridian to be independent and without conflicts of interest. Occidental also participates in and reviews compensation surveys conducted by compensation consultants, including the Compensation Committee’s independent compensation consultant,Meridian, in order to better understand general external compensation practices, including with respect to executive compensation.
Role of Stockholders.Shareholders. Occidental maintains an ongoing dialogue with its investors through its spring and fall stockholder engagement programs. During these programs, membersshareholders. Members of Occidental’s senior management team and, on a case-by-case basis, membersone or more of Occidental’s board ofindependent directors, meetengage with investors telephonically or in-person.shareholders through virtual and in-person meetings and phone calls. Input from these meetings regarding Occidental’s executive compensation practicespolicies and policiespractices is taken into account by the Compensation Committee in making future compensation decisions. In 2021, for example, shareholder feedback played a critical role in the Compensation Committee’s decision to increase the sustainability metric of the company performance portion of the ACI award to 30%, establishing a stronger link between potential bonus payout and the advancement of the company’s net-zero strategy. The Compensation Committee set targets for the sustainability metric to incentivize executives to promote carbon ventures and reduction projects (Scope 3 emissions) and enhance emissions reduction efforts (Scope 1 and 2 emissions). In February 2022, given shareholder responsiveness to the increase, the Compensation Committee determined to maintain the weighting of the sustainability metric. Based on shareholder feedback, the Compensation Committee also determined to maintain the mix of long-term incentive awards, which continues to emphasize our pay-for-performance philosophy.
Role of Peer Companies.Company Information. In order to evaluate how Occidental’s executive compensation program compares within the oil and gas industry, particularly with respect to award types, compensation mix, performance metrics and reported levels of compensation, the Compensation Committee reviews the executive compensation practices, programs and policies of itsa “compensation peer” companiespeer group,” as identified below. The Compensation Committee also reviews and considers generaloil and gas industry
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Compensation Discussion and Analysis
compensation surveys and related materials. This information is used only as a reference and not to establish compensation benchmarks, as Occidental does not benchmark executive compensation to a specific percentile within the compensation peer group. The Compensation Committee also maintains a “performance peer group of “performance peer” companiesgroup” within the oil and gas industry, and the value of the long-term TSR awards is dependent on Occidental’s three-year TSR performance as compared to the three-year TSR performance of the companies within the applicable performance peer companies.group. The Compensation Committee regularly reviews thethese peer companiesgroups to ensure that they have reasonably similar business strategies, represent a mix of integrated and independent oil and gas companies and generally compete against Occidental for investor dollars. Total S.A. and Canadian Natural Resources Limited are notdollars and/or executive talent. A review of this nature prompted the Compensation Committee to revise the 2021 compensation peer group and add the S&P 500 index as a performance peer. In updating the compensation peer group, the Compensation Committee faced the persistent challenge of finding current independent peers of comparable size in a shrinking pool of peer companies because we generally do not compete with them for executive talent, as they are headquartered outsidethe backdrop of the United States.pandemic and turbulent market conditions. It expanded its review to include companies representative of different oil industry sectors to include upstream, downstream and integrated companies and considered, among other things, enterprise value and companies with which Occidental competes for talent. As noted above, Occidental does not benchmark executive compensation to a specific percentile within the compensation peer group and did not seek direct alignment with pay levels or practices at peer companies when making the determination to update the 2021 compensation peer group.
| Company | Stock Ticker | Compensation Peers (2021) | Performance Peers (2021 TSR) | Enterprise Value at 12/31/21 ($ in billions)(1) | ||||||
| BP p.l.c. | BP | ■ | ■ | $ | 143.6 | |||||
| Chevron Corporation | CVX | ■ | ■ | $ | 258.4 | |||||
| ConocoPhillips | COP | ■ | ■ | $ | 102.9 | |||||
| EOG Resources, Inc. | EOG | ■ | ■ | $ | 53.1 | |||||
| ExxonMobil Corporation | XOM | ■ | $ | 317.8 | ||||||
| Hess Corporation | HES | ■ | $ | 30.2 | ||||||
| Marathon Petroleum Corporation | MPC | ■ | $ | 62.6 | ||||||
| Occidental Petroleum Corporation | OXY | $ | 68.1 | |||||||
| Phillips 66 | PSX | ■ | $ | 47.5 | ||||||
| Pioneer Natural Resources Company | PXD | ■ | $ | 50.9 | ||||||
| Shell plc | SHEL | ■ | ■ | $ | 227.5 | |||||
| TotalEnergies SE (formerly Total SE) | TTE | ■ | $ | 169.8 | ||||||
| Valero Energy Corporation | VLO | ■ | $ | 42.6 | ||||||
| S&P 500 Index | – | ■ | $ | – | ||||||
| (1) | Source: S&P Capital IQ. |
The chart below shows Occidental’s percentile rank versus its 2021 compensation peers for enterprise value and assets as of December 31, 2021. Occidental fell within the middle of its compensation peers for enterprise value (51st percentile) and assets (46th percentile).
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Occidental’s peer groups consistTable of Contents
Compensation Discussion and Analysis
Elements of the following companies:2021 Compensation Program
Base salary and “other” annual compensation (perquisites and certain other employee benefits) represented, on average, approximately 16% of the 2021 compensation packages of the named executive officers, based on compensation as reported in the Summary Compensation Table on page 58. In 2021, Ms. Hollub’s salary was partially restored to $1,000,000, which represents 74% of her pre-COVID salary. This follows a reduction in her base salary to $250,000 as of April 1, 2020 in light of the COVID-19 pandemic and other market conditions and a partial restoration of her salary to $500,000 as of August 1, 2020.
PARTIAL RESTORATION OF CEO BASE SALARY
Occidental Petroleum Corporation 29Mr. Peterson and Mr. Jackson each received a $25,000 increase to their respective base salaries. The Compensation Committee determined that these changes were appropriate in light of their respective performance and scope of responsibilities. There were no other changes to the 2021 base salaries of other named executive officers. For additional information regarding salary decisions for the named executive officers in 2021, see “Individual Compensation Considerations” beginning on page 52.
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Compensation Discussion and Analysis
The ACI award is intended to Contents
Individual Compensation Considerations
motivate executives to achieve superior company and individual performance over a one-year period. In making executive compensation decisions for a giventhe first quarter of each plan year, the Compensation Committee considers, amongapproves individual target award amounts for each executive officer based on a review of compensation surveys, publicly available peer company data, the executive’s prior-year award value, retention considerations, the balance of short- and long-term pay and internal pay equity. Potential payouts under the ACI award range from 0% to 200% of the target award amount, based on actual company and individual performance. The amounts earned by each named executive officer under the ACI award for 2021, which were paid in the first quarter of 2022, are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 58, as further described below.
Setting the Annual Cash Incentive. The Compensation Committee annually reviews all facets of the ACI award, with an aim to incentivize the NEOs to excel in areas that are aligned with Occidental’s business objectives. In February 2021, the Compensation Committee approved metrics related to the company’s total spend per barrel, which encompasses the company’s strategic, operational and financial performance, and sustainability goals. For the company performance portion of the ACI award, the Compensation Committee increased the sustainability metric weighting to 30% to promote the company’s net-zero strategy and incentivize executives to address Occidental’s Scope 1, 2 and 3 emissions in the short-term by including targets focused on carbon ventures and reduction projects and emissions reduction efforts. The Compensation Committee set target performance goals that it believed were rigorous based on Occidental’s detailed capital program and business plan, projections from the strategic planning team and business unit heads, prior-year results and third-party forecasts relating to future market conditions and other factors,external market factors.
Weighting the Metrics. The Compensation Committee determined that company performance metrics would comprise 80% of Ms. Hollub’s target ACI award, and 60% for the other named executive officers, with the remainder of the ACI award opportunity linked to an assessment of the performance of Occidental and the individual contributionsexecutive. The Compensation Committee determined to weight a larger portion of Ms. Hollub’s ACI award opportunity toward key company performance metrics because, as Chief Executive Officer, her leadership directly affects all aspects of the company’s performance.
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Compensation Discussion and Analysis
2021 Annual Cash Incentive Award
COMPANY PERFORMANCE PORTION
| Weight | Potential Payout Range | Performance Metric | Target Performance | Result as of December 31, 2021 | Implied Score Range (0% – 200%) | Weighted Score Range | ||||||||
 | Total Spend per Barrel | |||||||||||||
 | 0% - 140% | Total Spend per Barrel(1) | $18.70 | $18.07(2) | 160% - 170% | 110% - 120% | ||||||||
| Sustainability | ||||||||||||||
| Carbon Ventures and Reduction Projects | Advance carbon management platform ► Maintain first commercial-scale DAC facility on track for 2022 final investment decision (FID) ► Enter into at least 1 carbon capture, transport or sequestration joint venture ► Enter into at least 3 low-carbon product development transactions ► Formalize an internal carbon accounting function to enhance the monitoring and verification of CO2 and other GHG emissions | Above Target(3) | 120% - 130% | 15% - 25% | ||||||||||
 | 0% - 60% | Emissions Reduction Efforts | Reducing operating emissions ► Develop and implement an enhanced find it/fix it operational emissions program ► Deploy at least 3 new/additional technologies to advance Occidental’s areal and/or site specific GHG/methane emissions surveys and excess emissions controls ► Eliminate or retrofit approximately 900 high-bleed natural gas pneumatic controllers ► Implement a project to increase hydrogen recovery from an OxyChem facility and repurpose the hydrogen to generate zero-GHG emission energy to power OxyChem operations, expected to produce approximately 6,000 metric tons per year of CO2 emissions reductions ► Limit the upstream CO2e emissions intensity for new U.S. oil and gas field production activities to a level that is at least 10% below the 2018 value | Above Target(3) | 120% - 130% | 15% - 25% | ||||||||
| COMPANY PERFORMANCE PORTION TOTAL: | 140% - 170% | |||||||||||||
| TOTAL COMPANY PERFORMANCE PORTION PAYOUT: | 160% | |||||||||||||
| (1) | “Total Spend per Barrel” (TSPB) applies to continuing operations and equals the sum of SG&A, OPEX and CAPEX, divided by Mboe. For purposes of this review, “SG&A” or “selling, general and administrative expenses” means total SG&A and other operating and non-operating expenses for the company, prior to any accrual for the 2021 ACI award; “OPEX” or “operating expenses” means total upstream oil and gas lease operating expenses; “CAPEX” or “capital expenses” means total capital investment for the company; and “Mboe” means total million Boe produced in the year. |
| (2) | The Compensation Committee determined that it was appropriate to exercise discretion to adjust TSPB performance from $18.40 to $18.07 to reflect the impact of Winter Storm Uri on OPEX and production and reduced barrels due to production sharing contracts. |
| (3) | Sustainability objectives were deemed met above target as FEED commenced on the first DAC facility in May 2021. To enhance monitoring and verification of CO2 and other GHG emissions, management formed a carbon accounting team, among other things. Additionally, OLCV is in various stages of feasibility and pre-FEED studies for projects intended to advance innovative low-carbon technology, including CCUS opportunities. The company also deployed an enhanced Find It/Fix It emissions reduction program in the Permian Basin in the third quarter of 2021 and successfully retrofitted 925 high-bleed natural gas pneumatic controllers and an additional 79 devices in the Permian Basin. |
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Annual Cash Incentive Award – Individual Performance Portion. The individual performance portion of the ACI award (20% of the target annual cash incentive award for Ms. Hollub and 40% for the other named executive officers) links compensation directly to the performance of the executive. In the first quarter of 2021, the Compensation Committee established the performance objectives for Ms. Hollub, and Ms. Hollub established the performance objectives for her leadership team. In evaluating Ms. Hollub’s performance, the Compensation Committee principally considered the following performance goals:
| ► | Maintain focus on Occidental’s commitment to safety, health, the environment, sustainability, diversity, governance, social responsibility and the highest standards of ethical conduct and continue to foster a collaborative culture; |
| ► | Balance capital allocation, total spend and asset divestitures to optimize cash flow generation to further reduce debt; and |
| ► | Focus on optimizing the long-term return on invested capital by investing strategically within Occidental’s portfolio of assets, with an emphasis on life cycle development costs, including finding and development costs and long-term operating costs. |
For a detailed discussion of the Compensation Committee’s considerations with respect to each named executive officer’s individual performance, please see “Individual Compensation Considerations” beginning on page 52.
Long-Term Incentive Award Program
The majority of named executive officer compensation is determined by Occidental’s long-term performance. In 2021, similar to 2020, the long-term incentive award program included a performance-based TSR award (25%), a performance-based CROCE award (25%), a time-based RSU award (25%) and a NQSO award (25%), each of which is payable solely in shares of common stock. The long-term incentive awards are intended to motivate and incentivize executives to achieve results (including stock price performance) that are consistent with Occidental’s strategic business objectives. The Compensation Committee believes that long-term compensation should represent the largest portion of each named executive officerofficer’s total compensation package and that the levels of payout ultimately achieved should reflect Occidental’s performance, both relative to Occidental’s overallpeer company performance and on an absolute basis. During the performanceprocess of determining the executive’s business unit. Details regardingnamed executive officers’ long-term incentive compensation packages for 2021, the 2017 compensation decisionsCompensation Committee evaluated many factors, including:
| ► | Alignment of executive officer pay to achieving long-term growth in shareholder value; |
| ► | Linkage of any above-target payouts to superior performance and absolute returns; |
| ► | Shareholder feedback regarding long-term compensation metrics; |
| ► | Competitiveness with the compensation programs of peer companies; |
| ► | Impact of commodity prices on Occidental’s stock price and financial performance; and |
| ► | Allocation of total compensation between long-term and short-term components. |
2021 Long-Term Incentive Award Program. The 2021 long-term incentive program consisted of two PSU awards (one based on Occidental’s relative TSR and performance evaluationthe other based on absolute CROCE performance), a time-based RSU award and a NQSO award as indicated below. For 2021 awards, the Compensation Committee also added an additional condition for all NEO long-term incentive awards (CROCE, TSR, RSU and NQSO awards) in the form of a $22 stock price hurdle for 10 consecutive trading days post grant and prior to the expiration of each named executive officer is presented below. Mr. Stavros retired as Senior Vice Presidentaward, which was required to be achieved before any such awards would vest. Forfeiture and Chief Financial Officer from Occidental on May 30, 2017, and his compensation is describedchange in “control provisions applicable to the awards are discussed in more detail in the Potential Payments upon Termination or Change in Control” on page 45, table and in the accompanying footnotes, to the Executive Compensation Tables beginning on page 37.
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Ms. HollubTable of Contents
2021 Long-Term Incentive Award Mix at Grant Date
Total Shareholder Return (TSR) Award. The Compensation Committee believes that the comparison of Occidental’s three-year TSR to peer companies’ returns over the same period is an objective external measure of Occidental’s effectiveness in translating its results into shareholder returns. TSR is the Presidentchange in price of a share of common stock plus reinvested dividends, over a specified period of time, and Chief Executive Officeris an indicator of Occidental and has served as a membermanagement’s achievement of long-term growth in shareholder value. Payout of the BoardTSR award is based on Occidental’s three-year TSR as compared to the three-year TSR of Directors since December 2015. As Chief Executive Officer, Ms. Hollub is responsible for all operations, the financial management of Occidental, implementing Occidental’s strategy, and assistingperformance peers identified on page 44. For the Board with, among other matters, corporate strategy development, executive succession planning and talent development, and executive compensation.
Tenure. Ms. Hollub joined Occidental over 30 years ago and, before her appointment as Chief Executive Officer in 2016, she held a variety of increasingly significant leadership and technical positions on three continents, including roles in the United States, Russia, Venezuela and Ecuador.
Performance Assessment. In assessing Ms. Hollub’s individual performance in 2017,2021 TSR award, the Compensation Committee consideredadded the following accomplishmentsS&P 500 index as a performance peer. The TSR award is denominated in PSUs, each of which is equivalent to one share of common stock. The percentage of such number of PSUs that will be payable at the end of the three-year performance period, which began January 1, 2021 and actions:ends December 31, 2023, will depend on Occidental’s relative and absolute TSR performance.
If Occidental’s absolute TSR is negative over the performance period, then, irrespective of Occidental’s ranking within the peer group, the payout of the TSR award is capped at no more than target. A table illustrating the potential payout of the TSR award based on relative and absolute TSR performance is set forth below:
| TSR Ranking | %of Target PSUs Earned | |
| ► | #1 | 200% |
| ► | #2 | 180% |
| ► | #3-#7 | Linearly interpolated between 25% and 180% |
| ► | #8 | 25% |
| ► | #9 | 0% |
| For payout above 100%, Occidental’s absolute TSR must be positive. | ||
Maintained focusAn example of the interpolation calculation if Occidental ranked fourth among its TSR performance peers with respect to the 2021 TSR awards is as follows:
| TSR Ranking | Formula Points | Company | Standing | % of Target PSUs Earned | ||||
| #1 | AAA | 22.50% | 200% | |||||
| #2 | B | BBB | 20.00% | 180% | ||||
| #3 | CCC | 17.50% | ||||||
| #4 | OXY | 15.00% | Linearly interpolated between | |||||
| #5 | DDD | 12.50% | 25% and 180% | |||||
| #6 | EEE | 10.00% | ||||||
| #7 | FFF | 7.50% | ||||||
| #8 | A | GGG | 5.00% | 25% | ||||
| #9 | HHH | 2.50% | 0% | |||||
Interpolation Formula = 25% + [(180% - 25%) x ((OXY TSRI - A) / (B - A))] Interpolation Formula = 25% + [155% x ((15% - 5%) / (20% - 5%))] | ||||||||
| Interpolation Payout Result = 128.3% | ||||||||
The cap on the Company’s commitmentTSR award payout if TSR performance over the performance period is negative is intended to safety, health,reinforce the environment, diversity and inclusion, corporate governance, social responsibility andpay- for-performance nature of the highest standardscompensation program. No amounts were earned under the 2019 TSR awards, the performance period for which ended on December 31, 2021. The TSR award comprised 25% of ethical conduct, and continued to foster a collaborative culture.Under the leadership of Ms. Hollub, Occidental’s performance in these areas continued to excel, as evidenced by:
each NEO’s target long-term incentive award
| 2022 PROXY STATEMENT | ||
| 49 |
opportunity for 2021. Cumulative dividend equivalents will be paid in cash at the end of the three-year performance period and will be paid only on the number of PSUs earned.
Cash Return on Capital Employed (CROCE) Award. The CROCE award is designed to focus executives on the efficient use of capital by promoting discipline in capital allocation decisions. CROCE is a transparent measure of how efficiently Occidental uses its capital and is calculated from Occidental’s audited financial statements with no adjustments for special items. The CROCE award is denominated in PSUs, each of which is equivalent to one share of common stock. The percentage of such number of PSUs that become payable at the end of the applicable performance period depends on Occidental’s absolute CROCE during the performance period. The CROCE award comprised 25% of each NEO’s target long-term incentive award opportunity for 2021. A table illustrating the potential payout of the CROCE award based on CROCE performance is set forth below:
| CROCE of | 200% | |
| CROCE of 11% | 100% | |
| CROCE of 9% | 25% | |
| CROCE < 9% | 0% |
| (1) | |
| (2) |
EnhancedNon-Qualified Stock Option (NQSO) Award. The Compensation Committee has determined that including the value of Occidental’s portfolio of assets, withNQSO award as a focus on profitable development opportunities for all segmentscomponent of the Company;long-term incentive program reinforces the importance of stock price appreciation and implemented the Board-approved strategic review action items in a timely, beneficial,presents an opportunity to generate high-level alignment with shareholders. The NQSO award vests ratably over three years with one-third vesting on each of February 28, 2022, 2023 and efficient manner.Those efforts included:
2018 Notice of Annual Meeting and Proxy Statement 30
Focused on optimizing the long-term return on invested capital by investing strategically, with an emphasis on finding and development costs, operating costs and capital efficiency.Led by Ms. Hollub and relying on a disciplined business approach and returns-focused capital allocation decisions, Occidental:
Continued emphasis on identifying and developing the Company’s future leadership.Ms. Hollub has worked with senior management and the Board to ensure that the current and future leadership team is positioned to successfully meet the challenges of a dynamic industry. Specific accomplishments include:
Compensation Decisions
Occidental Petroleum Corporation 31
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Mr. Lowe has served as Executive Vice President of Occidental since February 2015 and Group Chairman, Middle East, since August 2016. Prior to that, Mr. Lowe served as President, Oxy Oil and Gas — International since 2009. Mr. Lowe is responsible for growing Occidental’s business in the Middle East, including strategy, business development, contract extensions and partner relationships.
Tenure.Mr. Lowe has been an employee of Occidental for over 30 years.
Performance Assessment. In assessing Mr. Lowe’s performance, the Compensation Committee considered his contributions to the success of Occidental’s operations in the Middle East, including the record-high production from Al Hosn Gas in 2017; his critical involvement in supporting the negotiation of agreements with the National Oil Companies and Petroleum Directorates in Abu Dhabi and Oman; and pursuit and achievement of additional opportunities in the region, including Occidental’s award of an exploration and production sharing agreement for Oman’s Block 30 and the 15-year extension of Oman’s Block 9.
Compensation Decisions
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Ms. Backus has served as General Counsel since October 2013, Senior Vice President since May 2014 and Chief Compliance Officer since February 2015. Ms. Backus is responsible for overseeing Occidental’s legal and compliance departments. Prior to joining Occidental, Ms. Backus was a partner at the law firm Vinson & Elkins L.L.P. heading the firm’s Energy Transactions/Projects Practice Group and serving in key leadership positions.
Tenure.Ms. Backus has been an employee of Occidental since October 2013.
Performance Assessment. In assessing Ms. Backus’s performance, the Compensation Committee considered her superior performance in handling ongoing litigation matters and development and implementation of proven litigation strategies; achievement of successful outcomes with respect to resolving litigation matters and other legal disputes; instrumental involvement in negotiations regarding several acquisitions and divestitures in 2017 that have enhanced the value of Occidental’s portfolio of assets; and leadership and oversight of the Company’s global legal department and compliance function.
Compensation Decisions
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Mr. Burgher joined Occidental as Senior Vice President and Chief Financial Officer on May 31, 2017. Mr. Burgher previously served as Senior Vice President at EOG Resources, where he led investor relations and reported directly to the Chief Executive Officer. Mr. Burgher is a seasoned energy executive with more than 30 years of experience leading financial and investor functions at a number of global companies. Mr. Burgher is responsible for Occidental’s tax, treasury and controller functions as well as investor relations.
2018 Notice of Annual Meeting and Proxy Statement 32
Sign-on Agreement. Pursuant to a sign-on agreement between Mr. Burgher and Occidental, which was approved by the Compensation Committee, Mr. Burgher’s base salary was set at $600,000 and he was eligible to receive an Annual Cash Incentive award for 2017 on the same terms and conditions as the other executive officers, with a target Annual Cash Incentive award of $600,000. Mr. Burgher received a cash sign-on bonus of $125,000 and will receive a second payment of $125,000 on May 31, 2018,2024, subject to continued employment. Mr. BurgherThe NEOs received a time-based25% of their 2021 long-term incentive award opportunity in the form of NQSOs.
Restricted Stock Unit (RSU) Award. The RSU award vests ratably over three years with one-third vesting on each of
February 28, 2022, 2023 and 2024, subject to continued employment. Each RSU is equivalent to one share of common stock, and payment for a target value of $2,500,000. Mr. Burgher’svested RSU award is subjectwill be made solely in shares of common stock. The shares of stock ultimately received by the named executive officer pursuant to the same terms and conditions as the 2017 RSU award granted to the other named executive officers, except that it was notare subject to a 162(m) performance condition. Mr. Burgher did not participatetwo-year post-vesting holding period. Dividend equivalents are accrued and paid out upon vesting. The NEOs received 25% of their 2021 long-term incentive award opportunity in the 2017 long-term incentive program. The sign-on arrangements were intended, in part, to compensate Mr. Burgher for his forfeitureform of awards that he had received from his prior employer. The Compensation Committee determined that these compensation elements and levels were appropriate based on Mr. Burgher’s experience, internal pay equity, peer company practices and general market data.RSUs.
Performance Assessment. In assessing Mr. Burgher’s performance, the Compensation Committee considered his leadership and management of his functional areas of responsibility, as well as his leadership and support for Occidental’s overall strategic goals and performance objectives. Mr. Burgher’s contributions included his involvement in preserving a strong balance sheet, liquidity position and investment grade credit ratings; maintaining effective financial controls and reports; and sustaining open engagement with institutional investors and analysts.
Compensation Decisions
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Mr. Vangolen has been Senior Vice President, Business Support since February 2015, and, prior to that role, he held positions of increasing responsibility in the oil and gas and corporate segments. In his current role, Mr. Vangolen is responsible for human resources; health, environment and safety; government relations; security; and information technology functions.
Tenure.Mr. Vangolen has been an employee of Occidental for over 35 years.
Performance Assessment. In assessing Mr. Vangolen’s performance, the Compensation Committee considered his active oversight of Occidental’s Health, Environment, Safety and Security functions, which received various honors and achievements in 2017, including eight OxyChem and OxyVinyls plants recognized by The Vinyl Institute for excellence in worker safety and environmental protection, based on performance against guidelines and standards established by federal agencies; superior performance in the handling of matters related to Hurricane Harvey, including the establishment of programs for affected employees and their families, such as financial assistance programs, and coordinating volunteer clean-up, tear-down and displacement relief opportunities for employees; continued implementation and oversight of the Re-Imagined Oilfield (RIO) project, an initiative aimed at driving innovation in the oilfield, which contributed to Occidental’s implementation of new technologies in 2017 that have reduced costs and optimized well performance.
Compensation Decisions
Occidental Petroleum Corporation 33
Other Compensation and Benefits
| Qualified Defined Contribution Plans |
Occidental does not have a defined benefit pension plan that provides named executive officers a fixed monthly retirement payment. Instead, all salaried employees on the U.S. dollar payroll, including the named executive officers, are eligible to participate in one or more tax-qualified defined contribution plans.
Savings Plan. For 2017,2021, the defined contribution 401(k) savings plan (Savings Plan) permitted employees to save a percentage of their annual salary up to the $270,000$290,000 limit set by IRS regulations, and employee pre-tax contributions were limited to $18,000.$19,500. Employees may direct their contributions to a variety of investments. Occidental matches two dollars for every one dollar the employee contributes up to 2% of eligible pay, plus an additional dollar-for-dollar match on the next 3% of eligible pay. The named executive officers are fully vested in their account balances under the Savings Plan. The amounts contributed by Occidental to the Savings Plan are included in the “All Other Compensation” column of the Summary Compensation Table on page 37.58.
Retirement Plan. The defined contribution retirement plan (Retirement Plan) is funded annually through a reallocation process from the employee’s Supplemental Retirement Plan II (SRP II) account balance (described below). Because it is not possible to determine the exact amount that could be contributed to the Retirement Plan without exceeding governmental limits cannot be determined until the end of the year, the reallocation process has been developed to maximize the amount contributed each year to a tax-qualified defined contribution plan. The Retirement Plan is company-funded, and employees may not contribute to the Retirement Plan. Except for Mr. Burgher, theThe named executive officers are fully vested in their account balances under the Retirement Plan. The amounts allocated to the Retirement Plan are included in the SRP II contributions by Occidental in the “All Other Compensation” column of the Summary Compensation Table on page 37.
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Nonqualified Deferred Compensation Plans
Occidental maintains two nonqualified deferred compensation plans: (i) the SRP II and (ii) the Modified Deferred Compensation Plan (MDCP). The purpose of the SRP II is to provide eligible employees, including the named executive officers, with benefits to compensate them for maximum limits imposed by law on the amount of contributions that may be made to Occidental’s tax-qualifiedtax- qualified defined contribution plans. The purpose of the MDCP is to provide key management and highly compensated employees the ability to accumulate additional retirement income through deferrals of compensation.
Additional information regarding the terms and conditions of the SRP II and the MDCP is describedprovided on page 44.pages 62 and 63. Amounts contributed to the SRP II on behalf of the named executive officers are included in the “All Other Compensation” column of the Summary Compensation Table on page 37. Amounts58. None of salary and bonus deferred by namedthe executive officers who participate inmade contributions to the MDCP are included as compensation in the “Salary,” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table on page 37, as applicable. In addition, the2021. The contributions, aggregate earnings, withdrawals and aggregate balances for the named executive officersNEOs in the SRP II and MDCP with respect to 20172021 are shown in the Nonqualified Deferred Compensation table on page 45. No above market earnings were paid in 2017 under either the SRP II or the MDCP.63.
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Occidental provides a limited number of perquisitesother personal benefits for its named executive officers, which, in 2017,2021, consisted principally of fees related to financial and tax planning, services and excess liability insurance.insurance and club dues.
| 2022 PROXY STATEMENT | ||
| 51 |
Compensation Discussion and Analysis
Individual Compensation Considerations
In making executive compensation decisions for a given year, the Compensation Committee considers, among other factors, the performance of Occidental and the individual contributions of each named executive officer. Details regarding the 2021 compensation decisions and performance evaluation of each named executive officer are presented below.
 | VICKI HOLLUB PRESIDENT AND CHIEF EXECUTIVE OFFICER |
| 2021 TARGET COMPENSATION | |||
| (Thousands) | |||
| Base Salary | $ | 1,000 | |
| Annual Cash Incentive | $ | 1,500 | |
| Long-Term Incentives | $ | 7,350 | |
| Total Annual Compensation | $ | 9,850 | |
Ms. Hollub is the President and Chief Executive Officer of Occidental. Ms. Hollub is responsible for all operations, the financial management of Occidental, implementing Occidental’s strategy, and assisting the Board with, among other matters, corporate strategy development, executive succession planning and talent development, and executive compensation for the other named executive officers.
Tenure. Ms. Hollub joined Occidental over 35 years ago, and before her appointment as Chief Executive Officer in 2016, she held a variety of increasingly significant leadership and technical positions on three continents.
Performance Assessment. In assessing Ms. Hollub’s individual performance for 2021, the Compensation Committee considered her accomplishments in the areas identified as individual performance goals on page 48. Highlights of the individual performance assessment are set forth below.
| ► | Ms. Hollub focused on cash flow generation, by balancing capital allocation and total spend, as well as asset divestitures to strengthen Occidental’s balance sheet and further reduce debt by $6.7 billion. | |
 | Occidental maintained operational priorities to maximize cash flow by sustaining production in line with its 2020 fourth- quarter rate with an annualized $2.9 billion capital budget and retaining a portion of cost savings achieved in 2020. | |
| OxyChem generated record earnings of $1.54 billion. | |
| Ms. Hollub completed Occidental’s large-scale divesture program. | |
| ► | Ms. Hollub advanced Occidental’s net-zero strategy that leverages Occidental’s carbon management expertise to achieve a lower- carbon future both within our operations and with customers and partners across industry sectors. | |
| Occidental endorsed the Methane Guiding Principles and the Oil and Gas Methane Partnership 2.0, a Climate and Clean Air Coalition initiative led by the United Nations Environment Programme. | |
| Occidental created an Emissions Technology Team (ETT) and implemented a Find It/Fix It program to expedite detection and repair of unplanned emissions with innovative monitoring and remote-sensing technologies, enterprise data management and improved estimation and reporting tools. | |
| Oxy Low Carbon Ventures (OLCV), one of Occidental’s subsidiaries, became a founding partner of the CCS+ Initiative, a venture to advance carbon accounting with the goal of scaling up global decarbonization and carbon removal. | |
| OLCV delivered the world’s first shipment of carbon-neutral oil in 2021, a key milestone in creating a new market for climate- differentiated crude oil that can supply hard-to-decarbonize industries, such as aviation and maritime. | |
| Performance Assessment (cont). | |
| ► | Through 1PointFive, which Occidental formed to commercialize Carbon Engineering’s DAC technology at an industrial scale, front-end engineering and design on Occidental’s first large-scale DAC facility began in May 2021 and is expected to be completed in the first half of 2022, with construction slated to commence in the second half of 2022. |
| Ms. Hollub continues to emphasize the necessity of safe, responsible operations. Significant initiatives in 2021 included joining the Onshore Safety Alliance, committing to API’s Energy Excellence program and championing Occidental’s Life-Saving Rules, all of which play a focal role in Occidental’s proactive incident reduction efforts. Ms. Hollub also launched Occidental’s Operating Management System (OMS), which integrates our systems for health, safety, environmental and sustainability performance, asset integrity, risk management and operational excellence. | |
| Ms. Hollub endorsed the World Economic Forum’s Stakeholder Capitalism Metrics and launched Occidental’s Diversity, Inclusion and Belonging (DIB) program to build on our vision and values and to facilitate communication and understanding among our workforce and sustained outreach in the broader community. The DIB program provides a platform for our employees to share their diverse backgrounds, unique experiences and points of view to spark innovation, empower growth, outperform expectations and maximize results. |
COMPENSATION DECISIONS
Base salary: Effective January 1, 2021, Ms. Hollub’s salary was partially restored to $1,000,000, reflecting an approximate 26% decrease from pre-COVID levels.
Annual Cash Incentive: Ms. Hollub’s target ACI award opportunity was set in February 2021 at $1,500,000, an approximate 26% decrease from 2020. The company performance portion of the ACI award was earned at 160% of target. Based on Ms. Hollub’s individual achievements described under Performance Assessment, the Compensation Committee determined that the individual performance portion of the ACI award was earned at 160% of target for a total annual cash incentive payout of $2,400,000.
Long-Term Incentives: The target grant date value of Ms. Hollub’s long-term incentive award package for 2021 was $7,350,000, a 30% decrease from 2020. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2021 Compensation Program – Long-Term Incentive Award Program” beginning on page 48.
The overall decrease in Ms. Hollub’s total target compensation for 2021, driven by Ms. Hollub’s reduced long-term incentive award value, was made to better align target compensation with shareholder experience while continuing to provide a competitive incentive.
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Compensation Discussion and Analysis
 | ROBERT L. PETERSON SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER |
| 2021 TARGET COMPENSATION | |||
| (Thousands) | |||
| Base Salary | $ | 650 | |
| Annual Cash Incentive | $ | 650 | |
| Long-Term Incentives | $ | 2,800 | |
| Total Annual Compensation | $ | 4,100 | |
Mr. Peterson has served as Senior Vice President and Chief Financial Officer since April 2020. Mr. Peterson previously served as Senior Vice President, Permian EOR, Occidental Oil and Gas, from September 2019 to April 2020. Prior to that, Mr. Peterson was Vice President, Permian Strategy, Occidental Oil and Gas, from November 2018 to September 2019, where he was responsible for developing and implementing a joint portfolio, technology and people strategy for the Company’s Permian business and ensuring alignment with Occidental’s Low Carbon Ventures strategy, and was President of OxyChem, the Company’s chemical subsidiary, from August 2014 to September 2017, where he was instrumental in completing its major capital investments and improving the profitability of the business.
Tenure. Mr. Peterson joined Occidental more than 25 years ago and, before his appointment as Senior Vice President and Chief Financial Officer in 2020, has held a variety of increasingly significant leadership positions.
Performance Assessment. In assessing Mr. Peterson’s performance, the Compensation Committee considered his leadership and management of his functional areas of responsibility, as well as his leadership and support for Occidental’s overall strategic goals and performance objectives. Mr. Peterson made meaningful contributions with respect to the oversight and management of the company’s balance sheet, liquidity position, credit ratings and financial controls, as well as efforts to optimize the capital program and maintain open engagement with shareholders and the financial community. Mr. Peterson’s contributions also included optimizing cash resources, reducing debt further and advancing the integration of Anadarko. This work included significantly improving the balance sheet through successful bond tenders to reduce gross debt, leveling debt maturity concentrations, and retiring interest rate swaps. Mr. Peterson also advanced tax efficiency strategies and other integration matters including the completion of SAP implementation throughout the domestic business.
COMPENSATION DECISIONS
Base salary: Effective January 1, 2021, Mr. Peterson’s salary was increased by $25,000 to $650,000, which the Compensation Committee determined was appropriate in light of his performance and scope of responsibilities.
Annual Cash Incentive: Mr. Peterson’s target ACI award opportunity was set at $650,000, an increase of $50,000 from 2020. The company performance portion of the ACI award was earned at 160% of target. Based on Mr. Peterson’s individual achievements described under Performance Assessment, the Compensation Committee determined that the individual performance portion of the ACI award was earned at 160% of target for a total annual cash incentive payout of $1,040,000.
Long-Term Incentives: The target grant date value of Mr. Peterson’s long-term incentive award package for 2021 was $2,800,000, an approximate 33% increase from 2020, which the Compensation Committee determined was appropriate in light of his performance and scope of responsibilities. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2021 Compensation Program – Long-Term Incentive Award Program” beginning on page 48.
| 2022 PROXY STATEMENT | ||
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Compensation Discussion and Analysis
 | MARCIA E. BACKUS SENIOR VICE PRESIDENT, GENERAL COUNSEL AND CHIEF COMPLIANCE OFFICER |
| 2021 TARGET COMPENSATION | |||
| (Thousands) | |||
| Base Salary | $ | 730 | |
| Annual Cash Incentive | $ | 800 | |
| Long-Term Incentives | $ | 3,000 | |
| Total Annual Compensation | $ | 4,530 | |
Ms. Backus has served as General Counsel since 2013, Senior Vice President since 2014 and Chief Compliance Officer since 2015. Ms. Backus is responsible for overseeing Occidental’s legal and compliance departments. Prior to joining Occidental, Ms. Backus was a partner at the law firm Vinson & Elkins L.L.P. heading the firm’s Energy Transactions/Projects practice group and serving in key leadership positions.
Tenure. Ms. Backus joined Occidental in 2013.
Performance Assessment. In assessing Ms. Backus’ performance, the Compensation Committee considered her instrumental involvement in the company’s successful balance sheet improvement efforts through tender offers, repurchases and redemptions, repaying $6.7 billion in debt, and in divestitures of approximately $2 billion of non-operated assets in the DJ Basin and non-strategic assets in the Permian Basin and Ghana, completing the company’s large-scale divestiture program. Ms. Backus demonstrated superior performance in handling litigation matters, developed and implemented proven litigation strategies and achieved successful outcomes.
COMPENSATION DECISIONS
Base salary: Ms. Backus’s base salary was $730,000, unchanged from 2020.
Annual Cash Incentive: Ms. Backus’s target ACI award opportunity was set at $800,000, unchanged from 2020. The company performance portion of the ACI award was earned at 160% of target. Based on Ms. Backus’s individual achievements described under Performance Assessment, the Compensation Committee determined that the individual performance portion of the ACI award was earned at 160% of target for a total annual cash incentive payout of $1,280,000.
Long-Term Incentives: The target grant date value of Ms. Backus’s long-term incentive award package for 2021 was $3,000,000, unchanged from 2020. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2021 Compensation Program – Long-Term Incentive Award Program” beginning on page 48.
 | KENNETH DILLON SENIOR VICE PRESIDENT |
| 2021 TARGET COMPENSATION | |||
| (Thousands) | |||
| Base Salary | $ | 675 | |
| Annual Cash Incentive | $ | 800 | |
| Long-Term Incentives | $ | 2,950 | |
| Total Annual Compensation | $ | 4,425 | |
Mr. Dillon is a Senior Vice President of Occidental and the President of International Oil and Gas Operations for Occidental Oil and Gas Corporation, a subsidiary of Occidental. In this role, Mr. Dillon oversees the company’s operations in the Middle East, North Africa, South America and Gulf of Mexico, as well as Major Projects.
Tenure. Mr. Dillon joined Occidental more than 25 years ago and, before his appointment as Senior Vice President in 2016, has held a variety of increasingly significant leadership positions.
Performance Assessment. In assessing Mr. Dillon’s performance, the Compensation Committee considered his contributions to the success of Occidental’s international and Gulf of Mexico operations, Major Projects activities in support of Low Carbon Ventures, and the sale of Occidental’s interests in two Ghana offshore fields. In addition, the following achievements were recognized: the award of the engineering, procurement and construction contract for the Al Hosn expansion, the NET Power first export milestone and significant operational improvements in deepwater drilling and reservoir performance.
COMPENSATION DECISIONS
Base salary: Mr. Dillon’s base salary was $675,000, unchanged from 2020.
Annual Cash Incentive: Mr. Dillon’s target ACI award opportunity was set at $800,000, unchanged from 2020. The company performance portion of the ACI award was earned at 160% of target. Based on Mr. Dillon’s individual achievements described under Performance Assessment, the Compensation Committee determined that the individual performance portion of the ACI award was earned at 160% of target for a total annual cash incentive payout of $1,280,000.
Long-Term Incentives: The target grant date value of Mr. Dillon’s long-term incentive award package for 2021 was $2,950,000, unchanged from 2020. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2021 Compensation Program – Long-Term Incentive Award Program” beginning on page 48.
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Compensation Discussion and Analysis
 | RICHARD A. JACKSON SENIOR VICE PRESIDENT |
| 2021 TARGET COMPENSATION | |||
| (Thousands) | |||
| Base Salary | $ | 650 | |
| Annual Cash Incentive | $ | 650 | |
| Long-Term Incentives | $ | 2,800 | |
| Total Annual Compensation | $ | 4,100 | |
Mr. Jackson is a Senior Vice President of Occidental and the U.S. Onshore Resources and Carbon Management – President, Operations. In this role, Mr. Jackson leads the development and operations of Occidental’s U.S. onshore oil and gas businesses while continuing to advance and integrate the company’s Low Carbon Ventures technologies and opportunities. His responsibilities include accelerating subsurface innovation, delivering value-added resource development, and advancing operational technologies and key low carbon innovations.
Tenure. Mr. Jackson joined Occidental more than 18 years ago and, before his appointment as Senior Vice President in 2020, has held a variety of increasingly significant leadership positions.
Performance Assessment. In assessing Mr. Jackson’s performance, the Compensation Committee considered his contributions to the success of Occidental’s U.S. Onshore Resources (Oil and Gas) and Low Carbon Ventures technical and business developments. U.S. Onshore Oil and Gas business results included continued advancements in operating safety and emissions reduction and achievement of cashflow improvement goals through increased production and more efficient capital and operating expenditures. Additionally, organizational improvements included implementation of a new functional U.S. production operations team and innovation teams focused on workforce processes and new technologies. OLCV advancements included formation of an emissions technology team to implement enhanced detection and measurement innovations, commercial scale direct-air capture development with Carbon Engineering, NET Power’s first electrical export milestone, additional CCUS project maturity milestones and carbon market advocacy and advancements.
COMPENSATION DECISIONS
Base salary: Effective January 1, 2021, Mr. Jackson’s salary was increased by $25,000 to $650,000, which the Compensation Committee determined was appropriate in light of his performance and scope of responsibilities.
Annual Cash Incentive: Mr. Jackson’s target ACI award opportunity was set at $650,000, unchanged from 2020. The company performance portion of the ACI award was earned at 160% of target. Based on Mr. Jackson’s individual achievements described under Performance Assessment, the Compensation Committee determined that the individual performance portion of the ACI award was earned at 160% of target for a total annual cash incentive payout of $1,040,000.
Long-Term Incentives: The target grant date value of Mr. Jackson’s long-term incentive award package for 2021 was $2,800,000, an approximate 27% increase from 2020, which the Compensation Committee determined was appropriate in light of his performance and scope of responsibilities. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2021 Compensation Program – Long-Term Incentive Award Program” beginning on page 48.
| 2022 PROXY STATEMENT | ||
| 55 |
Compensation Discussion and Analysis
Additional Compensation Policies and Practices
|
Occidental’s stock ownership guidelines are intended to more closely align the interests of the named executive officers with those of the company’s stockholders. shareholders.
The ownership requirementsguidelines range from six times to threethree-to-six times the officer’s annual base salary, based on position, as illustrated below:
| Position | Multiple of Base Salary |
| 6 | |
| 4 | |
| 3 |
2018 NoticeAn officer who does not meet the minimum ownership guideline may not sell any shares of Annual MeetingOccidental common stock until he or she meets the ownership guideline and Proxy Statement 34
meet the ownership guideline following any such sale. Unvested performance-based stock awards, andunvested performance-based stock units and unexercised stock options do not count toward satisfaction of the stock ownership guidelines. Officers subject to the guidelines are expected to comply within five years from the later of the effective date of the guidelines or the date the individual is named to a participating position. As of February 28, 2018, each of the named executive officers was in compliance with the guidelines.
|
The Compensation Committee made equity grants pursuant to the long-term incentive program at its regularly scheduled February meeting. The grant date fair value of each of the CROCE and RSU award and TSR award isawards was based on the closing price of Occidental’s common stock on the NYSE on the day the Compensation Committee granted the award,awards, and the grant date fair value of the TSR award also incorporates the estimated payout percentage of the award as of the grant date. The fair value of the NQSO awards is estimated using a Black Scholes model. As specifically authorized by the terms of the 2015 LTIP, the Compensation Committee has delegated to Ms. Hollub the authority to grant equity awards in certain circumstances to new employees and to grant equity awards to Occidental’s employees thatwho are not executive officers.officers within specified limits.
|
Section 162(m)Potential Recoupment of the Code, as in effect for 2017, limitedCompensation Due to $1 million the amount of compensation a company may deduct for federal income tax purposes in any one year for compensation paid to the Chief Executive Officer and the three other most highly compensated executive officers employed at year-end, excluding the Chief Financial Officer. However, Section 162(m) as in effect for 2017 provided that the $1 million deduction limit generally did not apply to compensation that is performance-based and provided pursuant to a stockholder-approved plan. The TSR award and RSU award granted to the named executive officers, other than Mr. Burgher, and the company performance portion of the Annual Cash Incentive award, were intended to be tax deductible under Section 162(m) as in effect at the time those awards were granted. Because there are uncertainties regarding the application of Section 162(m) of the Code, it is possible that awards intended to qualify for deductions under Section 162(m) may be challenged or disallowed. In addition, as a result of changes to the tax laws enacted in December 2017 and effective beginning January 1, 2018, we expect that equity awards or other compensation granted or provided under arrangements entered into or modified after November 2, 2017 to any person who is or was a named executive officer will not be deductible to the extent such amounts exceed $1 million in any one year.
Although tax consequences are considered in making compensation decisions, the Compensation Committee has not adopted a policy requiring that certain compensation elements must be deductible. Rather, the Compensation Committee gives priority to the overall compensation objectives discussed in this CD&A.
|
Misconduct
Occidental may recoup certain compensation from the executive officers in the event of misconduct pursuant to the terms of Occidental’s Code of Business Conduct, the terms of the plan underlying the Annual Cash IncentiveACI awards and the terms of the 2015 LTIP. Occidental’s Code of Business Conduct prohibits any officer, employee or director from violating or circumventing any law of the United States or a foreign country or engaging in unethical conduct during the course of his or her employment. The Audit Committee oversees compliance with the Code of Business Conduct and has put in place procedures, including a compliance hotline, to encourage prompt reporting of violations or suspected violations of the Code of Business Conduct, without fear of retaliation. In general, misconduct may have several consequences, including the following:
including:
| ► |
| ► |
| ► |
In addition, the 2015 LTIP includes a provision that gives Occidental the contractual right to recoup awards (i) where a participant has breached Occidental’s Business Code of Conduct by violating applicable law or company policy or engaging in unethical conduct or (ii) pursuant to a policy to be adopted by Occidental to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which will generally require recoupment of incentive-based compensation if Occidental is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement.
| | ||
| 56 |
Occidental Petroleum Corporation 35
Compensation Discussion and Analysis
Risk Assessment of Compensation Policies and Practices
Although the majority of the executive compensation pay program is performance-based, the Compensation Committee believes the program doesOccidental’s compensation programs do not encourage unnecessary or excessive risk-taking. In reaching its conclusion, the Compensation Committee reviewed the findings of a risk-taking analysis performed by its independent compensation consultant, Meridian. The Compensation Committee concurred with Meridian’s finding that Occidental’s executive compensation program includesprograms include multiple features that appropriately control motivations for excessive risk-taking and that the compensation program doesprograms do not encourage excessive risk-taking. TheWith respect to the executive compensation program, the compensation features that are indicative of appropriate risk-taking include, among others:
include:
| ► |
| ► | |
| ► | Capped |
| ► | Stock Ownership Guidelines and Holding Periods. Meaningful stock ownership guidelines and holding requirements for executives encourage a long-term perspective and require holding stock for extended periods. |
| ► | Clawback Provisions. The ACI award and long-term incentive |
| ► | Anti-Hedging Provisions. Occidental’s executive officers, directors and |
The Compensation Committee has reviewed and discussed with management the preceding Compensation Discussion and Analysis section for the year ended December 31, 2017.2021. Based on these reviews and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statementproxy statement for the 20182022 Annual Meeting of Stockholders.
Shareholders.
Respectfully submitted,
THE EXECUTIVE COMPENSATION COMMITTEE
Margaret M. Foran (Chair)
Spencer Abraham
John E. Feick
William R. Klesse
Jack B. Moore (Chair)
William R. Klesse
Margarita Paláu-Hernández
Avedick B. Poladian
| 2022 PROXY STATEMENT | ||
| 57 |
2018 Notice of Annual Meeting and Proxy Statement 36
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary(1) | Bonus(2) | Stock Awards(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation(5) | All Other Compensation(6) | Total | |||||||||||||||
Vicki Hollub President and | 2017 | $ | 1,250,000 | $ | 0 | $ | 8,500,028 | $ | 0 | $ | 2,475,000 | $ | 450,832 | $ | 12,675,860 | ||||||||
| 2016 | $ | 1,143,314 | $ | 0 | $ | 9,765,802 | $ | 0 | $ | 1,875,000 | $ | 214,379 | $ | 12,998,495 | |||||||||
| 2015 | $ | 687,500 | $ | 0 | $ | 4,062,500 | $ | 722,500 | $ | 0 | $ | 123,865 | $ | 5,596,365 | |||||||||
Edward Lowe Executive Vice President | 2017 | $ | 625,000 | $ | 1,250,000 | $ | 3,500,078 | $ | 0 | $ | 885,000 | $ | 214,541 | $ | 6,474,619 | ||||||||
| 2016 | $ | 625,000 | $ | 0 | $ | 4,029,783 | $ | 0 | $ | 750,000 | $ | 127,035 | $ | 5,531,818 | |||||||||
| 2015 | $ | 625,000 | $ | 0 | $ | 3,250,000 | $ | 170,000 | $ | 0 | $ | 147,973 | $ | 4,192,973 | |||||||||
Marcia Backus Senior Vice President, | 2017 | $ | 700,000 | $ | 0 | $ | 3,000,090 | $ | 0 | $ | 1,124,000 | $ | 219,370 | $ | 5,043,460 | ||||||||
| 2016 | $ | 646,970 | $ | 0 | $ | 4,059,535 | $ | 0 | $ | 800,000 | $ | 118,336 | $ | 5,624,841 | |||||||||
| 2015 | $ | 541,667 | $ | 500,000 | $ | 1,787,500 | $ | 170,000 | $ | 0 | $ | 135,841 | $ | 3,135,008 | |||||||||
Cedric Burgher Senior Vice President and | 2017 | $ | 353,425 | $ | 125,000 | $ | 2,500,046 | $ | 0 | $ | 804,000 | $ | 54,521 | $ | 3,836,992 | ||||||||
Glenn Vangolen Senior Vice President, | 2017 | $ | 617,192 | $ | 0 | $ | 2,750,068 | $ | 0 | $ | 1,050,000 | $ | 195,004 | $ | 4,612,264 | ||||||||
| 2016 | $ | 575,000 | $ | 0 | $ | 3,258,557 | $ | 0 | $ | 600,000 | $ | 103,097 | $ | 4,536,654 | |||||||||
Christopher Stavros (retired) Former Senior Vice President | 2017 | $ | 444,006 | $ | 2,100,000 | $ | 3,000,090 | (7) | $ | 0 | $ | 356,000 | $ | 493,484 | $ | 6,393,580 | |||||||
| 2016 | $ | 650,000 | $ | 0 | $ | 4,059,535 | $ | 0 | $ | 800,000 | $ | 185,777 | $ | 5,695,312 | |||||||||
| 2015 | $ | 600,000 | $ | 0 | $ | 2,437,500 | $ | 425,000 | $ | 0 | $ | 795,794 | $ | 4,258,294 | |||||||||
| SUMMARY COMPENSATION TABLE | ||||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | ||||||||||||||||
| Vicki Hollub | 2021 | $ | 1,000,000 | $ | – | $ | 5,512,829 | $ | 1,837,511 | $ | 2,400,000 | $ | 318,199 | $ | 11,068,539 | |||||||||
| President and Chief Executive Officer | 2020 | $ | 616,966 | $ | – | $ | 9,650,069 | $ | 2,625,002 | $ | 1,012,500 | $ | 260,914 | $ | 14,165,451 | |||||||||
| 2019 | $ | 1,330,769 | $ | 1,417,500 | $ | 10,500,091 | $ | – | $ | 2,126,250 | $ | 616,293 | $ | 15,990,903 | ||||||||||
| Robert L. Peterson | 2021 | $ | 650,000 | $ | – | $ | 2,100,135 | $ | 700,003 | $ | 1,040,000 | $ | 170,980 | $ | 4,661,118 | |||||||||
| Senior Vice President and Chief Financial Officer | 2020 | $ | 511,644 | $ | – | $ | 2,854,296 | $ | – | $ | 300,000 | $ | 246,764 | $ | 3,912,704 | |||||||||
| Marcia E. Backus | 2021 | $ | 730,000 | $ | – | $ | 2,250,167 | $ | 750,007 | $ | 1,280,000 | $ | 195,313 | $ | 5,205,487 | |||||||||
| Senior Vice President, General Counsel and Chief Compliance Officer | 2020 | $ | 571,562 | $ | – | $ | 2,689,817 | $ | 750,002 | $ | 400,000 | $ | 285,678 | $ | 4,697,059 | |||||||||
| 2019 | $ | 724,231 | $ | 420,000 | $ | 3,000,098 | $ | – | $ | 980,000 | $ | 276,514 | $ | 5,400,843 | ||||||||||
| Kenneth Dillon | 2021 | $ | 675,000 | $ | – | $ | 2,212,632 | $ | 737,503 | $ | 1,280,000 | $ | 169,936 | $ | 5,075,071 | |||||||||
| Senior Vice President | 2020 | $ | 461,438 | $ | – | $ | 2,212,565 | $ | 737,501 | $ | 400,000 | $ | 261,594 | $ | 4,073,098 | |||||||||
| Richard A. Jackson | 2021 | $ | 650,000 | $ | – | $ | 2,100,135 | $ | 700,003 | $ | 1,040,000 | $ | 163,523 | $ | 4,653,661 | |||||||||
| Senior Vice President | ||||||||||||||||||||||||
| (1) |
| For |
| officers. The grant date fair value of each of the CROCE and RSU |
| date. The grant date fair value of |
| (2) |
| officers. The | ||
| (3) | Amounts shown represent the final, earned ACI award. For more information regarding the |
Occidental Petroleum Corporation 37
| The following table shows “All Other Compensation” amounts for |
| V. Hollub | E. Lowe | M. Backus | C. Burgher | G. Vangolen | C. Stavros | V. Hollub | R. Peterson | M. Backus | K. Dillon | R. Jackson | ||||||||||||||||||||||||||||||||||
| Savings Plan(a) | $ | 18,900 | $ | 18,900 | $ | 18,900 | $ | 18,900 | $ | 18,900 | $ | 18,900 | $ | 20,300 | $ | 20,300 | $ | 20,300 | $ | 20,300 | $ | 20,300 | ||||||||||||||||||||||
| SRP II(b) | $ | 427,711 | $ | 180,469 | $ | 200,470 | $ | 35,621 | $ | 155,437 | $ | 130,967 | $ | 285,056 | $ | 132,873 | $ | 160,800 | $ | 149,636 | $ | 143,223 | ||||||||||||||||||||||
| MDCP(c) | $ | 4,221 | $ | — | $ | — | $ | — | $ | 5,250 | $ | 3,500 | ||||||||||||||||||||||||||||||||
| Personal Benefits | $ | — | $ | 15,172 | (d) | $ | — | $ | — | $ | 15,417 | (e) | $ | 340,117 | (f) | $ | 12,843 | (c) | $ | 17,807 | (d) | $ | 14,213 | (e) | $ | – | $ | – | ||||||||||||||||
| Total | $ | 450,832 | $ | 214,541 | $ | 219,370 | $ | 54,521 | $ | 195,004 | $ | 493,484 | $ | 318,199 | $ | 170,980 | $ | 195,313 | $ | 169,936 | $ | 163,523 | ||||||||||||||||||||||
| (a) |
| (b) |
| (c) |
| (d) |
| (e) |
| ||
| 58 |
2018 Notice of Annual Meeting and Proxy Statement 38
Executive Compensation Tables
The table below shows the plan-based awards granted by the Compensation Committee to the named executive officers in 2017.2021. For a summary of the key terms of the awards granted pursuant to the 20172021 long-term incentive program, see “Elements of the 20172021 Compensation Program – Long-Term Incentive CompensationAward Program” beginning on page 27.48. For the actual amounts earned under the Annual Cash IncentiveACI award, see the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 37.58.
GRANTS OF PLAN-BASED AWARDS
| All Other | ||||||||||||||||||||||||||||||
| Estimated Possible Payouts | Estimated Future Payouts | Stock | Grant Date | |||||||||||||||||||||||||||
| Under Non-Equity Incentive | Under Equity Incentive | Awards: # of | Fair Value of | |||||||||||||||||||||||||||
| Plan Awards(1) | Plan Awards | Shares of | Stock | |||||||||||||||||||||||||||
| Name/Type | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock or | Awards | |||||||||||||||||||||
| of Grant | Date | $ | $ | $ | # Shares | # Shares | # Shares | Units | ($) | |||||||||||||||||||||
| V. Hollub | ||||||||||||||||||||||||||||||
| ACI | $ 0 | $ | 1,875,000 | $ | 3,750,000 | |||||||||||||||||||||||||
| RSU(2) | 02/15/17 | 37,941 | $ | 2,550,015 | ||||||||||||||||||||||||||
| TSR(3) | 02/15/17 | 26,405 | 105,619 | 211,238 | $ | 5,950,013 | ||||||||||||||||||||||||
| E. Lowe | ||||||||||||||||||||||||||||||
| ACI | $ 0 | $ | 750,000 | $ | 1,500,000 | |||||||||||||||||||||||||
| RSU(2) | 02/15/17 | 23,435 | $ | 1,575,066 | ||||||||||||||||||||||||||
| TSR(3) | 02/15/17 | 8,543 | 34,171 | 68,342 | $ | 1,925,012 | ||||||||||||||||||||||||
| M. Backus | ||||||||||||||||||||||||||||||
| ACI | $ 0 | $ | 800,000 | $ | 1,600,000 | |||||||||||||||||||||||||
| RSU(2) | 02/15/17 | 20,087 | $ | 1,350,047 | ||||||||||||||||||||||||||
| TSR(3) | 02/15/17 | 7,323 | 29,290 | 58,580 | $ | 1,650,043 | ||||||||||||||||||||||||
| C. Burgher | ||||||||||||||||||||||||||||||
| ACI | $ 0 | $ | 600,000 | $ | 1,200,000 | |||||||||||||||||||||||||
| RSU(4) | 05/31/17 | 42,424 | $ | 2,500,046 | ||||||||||||||||||||||||||
| G. Vangolen | ||||||||||||||||||||||||||||||
| ACI | $ 0 | $ | 700,000 | $ | 1,400,000 | |||||||||||||||||||||||||
| RSU(2) | 02/15/17 | 18,413 | $ | 1,237,538 | ||||||||||||||||||||||||||
| TSR(3) | 02/15/17 | 6,712 | 26,849 | 53,698 | $ | 1,512,530 | ||||||||||||||||||||||||
| C. Stavros (retired)(5) | ||||||||||||||||||||||||||||||
| ACI | $ 0 | $ | 900,000 | $ | 1,800,000 | |||||||||||||||||||||||||
| RSU(2) | 02/15/17 | 20,087 | $ | 1,350,047 | ||||||||||||||||||||||||||
| TSR(3) | 02/15/17 | 7,323 | 29,290 | 58,580 | $ | 1,650,043 | ||||||||||||||||||||||||
Occidental Petroleum Corporation 39
| GRANTS OF PLAN-BASED AWARDS | |||||||||||||||||||||||||||||||||
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: | All Other Option Awards: | Grant Date Fair Value of | |||||||||||||||||||||||||||||
| Name/ Type of Award | Grant Date | Threshold $ | Target $ | Maximum $ | Threshold # Shares | Target # Shares | Maximum # Shares | # of Shares of Stock or Units | # of Securities Underlying Options | Exercise Price of Options ($) | Stock and Option Awards ($) | ||||||||||||||||||||||
| V. Hollub | |||||||||||||||||||||||||||||||||
| ACI | $ | – | $ | 1,500,000 | $ | 3,000,000 | |||||||||||||||||||||||||||
| CROCE(2) | 02/12/2021 | 18,093 | 72,372 | 144,744 | $ | 1,837,525 | |||||||||||||||||||||||||||
| RSU(3) | 02/12/2021 | 72,372 | $ | 1,837,525 | |||||||||||||||||||||||||||||
| TSR(4) | 02/12/2021 | 12,499 | 49,994 | 99,988 | $ | 1,837,779 | |||||||||||||||||||||||||||
| NQSO(5) | 02/12/2021 | 144,454 | $ | 25.39 | $ | 1,837,511 | |||||||||||||||||||||||||||
| R. Peterson | |||||||||||||||||||||||||||||||||
| ACI | $ | – | $ | 650,000 | $ | 1,300,000 | |||||||||||||||||||||||||||
| CROCE(2) | 02/12/2021 | 6,893 | 27,570 | 55,140 | $ | 700,002 | |||||||||||||||||||||||||||
| RSU(3) | 02/12/2021 | 27,570 | $ | 700,002 | |||||||||||||||||||||||||||||
| TSR(4) | 02/12/2021 | 4,762 | 19,046 | 38,092 | $ | 700,131 | |||||||||||||||||||||||||||
| NQSO(5) | 02/12/2021 | 55,030 | $ | 25.39 | $ | 700,003 | |||||||||||||||||||||||||||
| M. Backus | |||||||||||||||||||||||||||||||||
| ACI | $ | – | $ | 800,000 | $ | 1,600,000 | |||||||||||||||||||||||||||
| CROCE(2) | 02/12/2021 | 7,385 | 29,540 | 59,080 | $ | 750,021 | |||||||||||||||||||||||||||
| RSU(3) | 02/12/2021 | 29,540 | $ | 750,021 | |||||||||||||||||||||||||||||
| TSR(4) | 02/12/2021 | 5,102 | 20,406 | 40,812 | $ | 750,125 | |||||||||||||||||||||||||||
| NQSO(5) | 02/12/2021 | 58,961 | $ | 25.39 | $ | 750,007 | |||||||||||||||||||||||||||
| K. Dillon | |||||||||||||||||||||||||||||||||
| ACI | $ | – | $ | 800,000 | $ | 1,600,000 | |||||||||||||||||||||||||||
| CROCE(2) | 02/12/2021 | 7,262 | 29,047 | 58,094 | $ | 737,503 | |||||||||||||||||||||||||||
| RSU(3) | 02/12/2021 | 29,047 | $ | 737,503 | |||||||||||||||||||||||||||||
| TSR(4) | 02/12/2021 | 5,017 | 20,066 | 40,132 | $ | 737,626 | |||||||||||||||||||||||||||
| NQSO(5) | 02/12/2021 | 57,978 | $ | 25.39 | $ | 737,503 | |||||||||||||||||||||||||||
| R. Jackson | |||||||||||||||||||||||||||||||||
| ACI | $ | – | $ | 650,000 | $ | 1,300,000 | |||||||||||||||||||||||||||
| CROCE(2) | 02/12/2021 | 6,893 | 27,570 | 55,140 | $ | 700,002 | |||||||||||||||||||||||||||
| RSU(3) | 02/12/2021 | 27,570 | $ | 700,002 | |||||||||||||||||||||||||||||
| TSR(4) | 02/12/2021 | 4,762 | 19,046 | 38,092 | $ | 700,131 | |||||||||||||||||||||||||||
| NQSO(5) | 02/12/2021 | 55,030 | $ | 25.39 | $ | 700,003 | |||||||||||||||||||||||||||
| (1) | Amounts shown reflect the possible payout range of the |
| (2) | |
| (3) | The grant date fair value of the RSU award is equal to the number of |
| 2022 PROXY STATEMENT | ||
| 59 |
Executive Compensation Tables
| (4) | The grant date fair value of the TSR award is based on a Monte Carlo simulation in accordance with FASB ASC 718. Actual payout of the TSR award may be zero or |
| The grant date fair value of |
2018 Notice of Annual Meeting and Proxy Statement 40
The table below sets forth the outstanding equity awards held by the named executive officers as of December 31, 2017.2021.
| OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2021 | |||||||||||||||||||||||
| Nonqualified Stock Options and Stock Appreciation Rights | Stock Awards | ||||||||||||||||||||||
| Name/ Type of Award | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price(1) ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(2) | ||||||||||||||
| V. Hollub | |||||||||||||||||||||||
| NQSO(3) | 02/11/15 | 88,341 | $ | 76.96 | 2/11/2022 | ||||||||||||||||||
| NQSO(3) | 02/14/20 | 199,770 | 399,539 | $ | 40.03 | 2/14/2030 | |||||||||||||||||
| NQSO(3) | 02/12/21 | 144,454 | $ | 25.39 | 2/12/2031 | ||||||||||||||||||
| SAR(3) | 02/14/20 | 85,616 | 171,230 | $ | 40.03 | 2/14/2030 | |||||||||||||||||
| RSU(4) | 02/15/19 | 15,627 | $ | 453,027 | |||||||||||||||||||
| RSU(4) | 02/14/20 | 42,067 | $ | 1,219,522 | |||||||||||||||||||
| RSU(4) | 02/14/20 | 40,565 | $ | 1,175,979 | |||||||||||||||||||
| RSU(4) | 02/12/21 | 72,372 | $ | 2,098,064 | |||||||||||||||||||
| CROCE(5) | 02/14/20 | 126,202 | $ | 3,658,596 | |||||||||||||||||||
| CROCE(5) | 02/12/21 | 144,744 | $ | 4,196,129 | |||||||||||||||||||
| PRI(6) | 07/08/15 | 8,616 | $ | 249,778 | |||||||||||||||||||
| TSR(7) | 02/14/20 | 14,966 | $ | 433,864 | |||||||||||||||||||
| TSR(7) | 02/12/21 | 49,994 | $ | 1,449,326 | |||||||||||||||||||
| R. Peterson | |||||||||||||||||||||||
| NQSO(3) | 02/11/15 | 15,589 | $ | 76.96 | 2/11/2022 | ||||||||||||||||||
| NQSO(3) | 02/12/21 | 55,030 | $ | 25.39 | 2/12/2031 | ||||||||||||||||||
| RSU(4) | 02/15/19 | 5,209 | $ | 151,009 | |||||||||||||||||||
| RSU(4) | 02/14/20 | 16,827 | $ | 487,815 | |||||||||||||||||||
| RSU(4) | 02/12/21 | 27,570 | $ | 799,254 | |||||||||||||||||||
| CROCE(5) | 02/12/21 | 55,140 | $ | 1,598,509 | |||||||||||||||||||
| PRI(6) | 07/08/15 | 2,585 | $ | 74,939 | |||||||||||||||||||
| TSR(7) | 02/14/20 | 5,987 | $ | 173,563 | |||||||||||||||||||
| TSR(7) | 02/12/21 | 19,046 | $ | 552,144 | |||||||||||||||||||
| PhSU(8) | 11/01/19 | 44,337 | $ | 1,285,330 | |||||||||||||||||||
| | ||
| 60 |
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2017
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Equity incentive | Equity incentive | |||||||||||||||||||||||||||||
| Market | plan awards: | plan awards: | ||||||||||||||||||||||||||||
| Number | Number | Number of | value of | number of | market or | |||||||||||||||||||||||||
| of securities | of securities | restricted | restricted | unearned | payout value of | |||||||||||||||||||||||||
| underlying | underlying | Option | stock units | stock units | shares, units | unearned shares, | ||||||||||||||||||||||||
| unexercised | unexercised | exercise | Option | that have not | that have | or other rights | units or other | |||||||||||||||||||||||
| options (#) | options (#) | price | expiration | vested | not vested | that have not | rights that have | |||||||||||||||||||||||
| Name/Type of Award | Grant Date | exercisable | un-exercisable | ($) | date | (#) | (#)(1) | vested (#) | not vested ($)(1) | |||||||||||||||||||||
| V. Hollub | ||||||||||||||||||||||||||||||
| NQSO(2) | 02/11/2015 | 56,667 | 28,333 | $ | 79.98 | 2/11/2022 | ||||||||||||||||||||||||
| RSU(3) | 02/17/2016 | 16,666 | $ | 1,227,618 | ||||||||||||||||||||||||||
| RSU(3) | 07/13/2016 | 20,825 | $ | 1,533,970 | ||||||||||||||||||||||||||
| RSU(3) | 02/15/2017 | 37,941 | $ | 2,794,734 | ||||||||||||||||||||||||||
| RSI(4) | 07/22/2013 | 4,470 | $ | 329,260 | ||||||||||||||||||||||||||
| RSI(4) | 07/09/2014 | 13,955 | $ | 1,027,925 | ||||||||||||||||||||||||||
| ROCE(5) | 07/08/2015 | 17,232 | $ | 1,269,309 | ||||||||||||||||||||||||||
| PRI(6) | 07/08/2015 | 25,848 | $ | 1,903,964 | ||||||||||||||||||||||||||
| TSR(7) | 07/08/2015 | 22,169 | $ | 1,632,969 | ||||||||||||||||||||||||||
| TSR(7) | 07/13/2016 | 84,179 | $ | 6,200,625 | ||||||||||||||||||||||||||
| TSR(7) | 02/15/2017 | 211,238 | $ | 15,559,791 | ||||||||||||||||||||||||||
| E. Lowe | ||||||||||||||||||||||||||||||
| NQSO(2) | 02/11/2015 | 13,334 | 6,666 | $ | 79.98 | 2/11/2022 | ||||||||||||||||||||||||
| RSU(3) | 02/17/2016 | 5,000 | $ | 368,300 | ||||||||||||||||||||||||||
| RSU(3) | 07/13/2016 | 13,666 | $ | 1,006,638 | ||||||||||||||||||||||||||
| RSU(3) | 02/15/2017 | 23,435 | $ | 1,726,222 | ||||||||||||||||||||||||||
| RSI(4) | 07/11/2012 | 19,938 | $ | 1,468,633 | ||||||||||||||||||||||||||
| RSI(4) | 07/22/2013 | 15,469 | $ | 1,139,447 | ||||||||||||||||||||||||||
| RSI(4) | 07/09/2014 | 13,955 | $ | 1,027,925 | ||||||||||||||||||||||||||
| ROA(5) | 07/08/2015 | 690 | $ | 50,789 | ||||||||||||||||||||||||||
| ROA-MENA(8) | 07/08/2015 | 22,058 | $ | 1,624,792 | ||||||||||||||||||||||||||
| PRI(6) | 07/08/2015 | 20,678 | $ | 1,523,141 | ||||||||||||||||||||||||||
| TSR(7) | 07/08/2015 | 17,735 | $ | 1,306,360 | ||||||||||||||||||||||||||
| TSR(7) | 07/13/2016 | 28,937 | $ | 2,131,499 | ||||||||||||||||||||||||||
| TSR(7) | 02/15/2017 | 68,342 | $ | 5,034,072 | ||||||||||||||||||||||||||
| M. Backus | ||||||||||||||||||||||||||||||
| NQSO(2) | 02/11/2015 | 13,334 | 6,666 | $ | 79.98 | 2/11/2022 | ||||||||||||||||||||||||
| RSU(3) | 02/17/2016 | 10,000 | $ | 736,600 | ||||||||||||||||||||||||||
| RSU(3) | 07/13/2016 | 11,714 | $ | 862,853 | ||||||||||||||||||||||||||
| RSU(3) | 02/15/2017 | 20,087 | $ | 1,479,608 | ||||||||||||||||||||||||||
| RSI(4) | 10/01/2013 | 20,096 | $ | 1,480,271 | ||||||||||||||||||||||||||
| RSI(4) | 07/09/2014 | 6,203 | $ | 456,913 | ||||||||||||||||||||||||||
| ROCE(5) | 07/08/2015 | 7,583 | $ | 558,564 | ||||||||||||||||||||||||||
| PRI(6) | 07/08/2015 | 11,374 | $ | 837,809 | ||||||||||||||||||||||||||
| TSR(7) | 07/08/2015 | 9,755 | $ | 718,553 | ||||||||||||||||||||||||||
| TSR(7) | 07/13/2016 | 24,803 | $ | 1,826,989 | ||||||||||||||||||||||||||
| TSR(7) | 02/15/2017 | 58,580 | $ | 4,315,003 | ||||||||||||||||||||||||||
Occidental Petroleum Corporation 41
Executive Compensation Tables
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Equity incentive | Equity incentive | |||||||||||||||||||||||||||||
| Market | plan awards: | plan awards: | ||||||||||||||||||||||||||||
| Number | Number | Number of | value of | number of | market or | |||||||||||||||||||||||||
| of securities | of securities | restricted | restricted | unearned | payout value of | |||||||||||||||||||||||||
| underlying | underlying | Option | stock units | stock units | shares, units | unearned shares, | ||||||||||||||||||||||||
| unexercised | unexercised | exercise | Option | that have not | that have | or other rights | units or other | |||||||||||||||||||||||
| options (#) | options (#) | price | expiration | vested | not vested | that have not | rights that have | |||||||||||||||||||||||
| Name/Type of Award | Grant Date | exercisable | un-exercisable | ($) | date | (#) | (#)(1) | vested (#) | not vested ($)(1) | |||||||||||||||||||||
| C. Burgher | ||||||||||||||||||||||||||||||
| RSU(3) | 05/31/2017 | 42,424 | $ | 3,124,952 | ||||||||||||||||||||||||||
| G. Vangolen | ||||||||||||||||||||||||||||||
| NQSO(2) | 02/11/2015 | 23,334 | 11,666 | $ | 79.98 | 2/11/2022 | ||||||||||||||||||||||||
| RSU(3) | 02/17/2016 | 4,800 | $ | 353,568 | ||||||||||||||||||||||||||
| RSU(3) | 07/13/2016 | 10,738 | $ | 790,961 | ||||||||||||||||||||||||||
| RSU(3) | 02/15/2017 | 18,413 | $ | 1,356,302 | ||||||||||||||||||||||||||
| RSI(4) | 07/09/2014 | 4,963 | $ | 365,575 | ||||||||||||||||||||||||||
| ROCE(5) | 07/08/2015 | 8,272 | $ | 609,316 | ||||||||||||||||||||||||||
| PRI(6) | 07/08/2015 | 12,407 | $ | 913,900 | ||||||||||||||||||||||||||
| TSR(7) | 07/08/2015 | 10,641 | $ | 783,816 | ||||||||||||||||||||||||||
| TSR(7) | 07/13/2016 | 22,736 | $ | 1,674,734 | ||||||||||||||||||||||||||
| TSR(7) | 02/15/2017 | 53,698 | $ | 3,955,395 | ||||||||||||||||||||||||||
| C. Stavros(9) | ||||||||||||||||||||||||||||||
| NQSO(2) | 02/11/2015 | 39,736 | 0 | $ | 79.98 | 2/11/2022 | ||||||||||||||||||||||||
| RSI(4) | 07/11/2012 | 9,471 | $ | 697,634 | ||||||||||||||||||||||||||
| RSI(4) | 07/22/2013 | 8,709 | $ | 641,505 | ||||||||||||||||||||||||||
| RSI(4) | 07/09/2014 | 7,697 | $ | 566,961 | ||||||||||||||||||||||||||
| ROCE(5) | 07/08/2015 | 10,340 | $ | 761,644 | ||||||||||||||||||||||||||
| PRI(6) | 07/08/2015 | 11,148 | $ | 821,162 | ||||||||||||||||||||||||||
| TSR(7) | 07/08/2015 | 13,302 | $ | 979,825 | ||||||||||||||||||||||||||
| TSR(7) | 07/13/2016 | 8,268 | $ | 609,021 | ||||||||||||||||||||||||||
| TSR(7) | 02/15/2017 | 9,684 | $ | 713,323 | ||||||||||||||||||||||||||
2018 Notice of Annual Meeting and Proxy Statement 42
| Nonqualified Stock Options and Stock Appreciation Rights | Stock Awards | ||||||||||||||||||||||
| Name/ Type of Award | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price(1) ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(2) | ||||||||||||||
| M. Backus | |||||||||||||||||||||||
| NQSO(3) | 02/11/15 | 20,786 | $ | 76.96 | 2/11/2022 | ||||||||||||||||||
| NQSO(3) | 02/14/20 | 81,539 | 163,077 | $ | 40.03 | 2/14/2030 | |||||||||||||||||
| NQSO(3) | 02/12/21 | 58,961 | $ | 25.39 | 2/12/2031 | ||||||||||||||||||
| RSU(4) | 02/15/19 | 6,697 | $ | 194,146 | |||||||||||||||||||
| RSU(4) | 02/14/20 | 12,019 | $ | 348,431 | |||||||||||||||||||
| RSU(4) | 02/12/21 | 29,540 | $ | 856,365 | |||||||||||||||||||
| CROCE(5) | 02/14/20 | 36,058 | $ | 1,045,321 | |||||||||||||||||||
| CROCE(5) | 02/12/21 | 59,080 | $ | 1,712,729 | |||||||||||||||||||
| PRI(6) | 07/08/15 | 3,792 | $ | 109,930 | |||||||||||||||||||
| TSR(7) | 02/14/20 | 4,276 | $ | 123,961 | |||||||||||||||||||
| TSR(7) | 02/12/21 | 20,406 | $ | 591,570 | |||||||||||||||||||
| K. Dillon | |||||||||||||||||||||||
| NQSO(3) | 02/11/15 | 15,589 | $ | 76.96 | 2/11/2022 | ||||||||||||||||||
| NQSO(3) | 02/14/20 | 80,180 | 160,359 | $ | 40.03 | 2/14/2030 | |||||||||||||||||
| NQSO(3) | 02/12/21 | 57,978 | $ | 25.39 | 2/12/2031 | ||||||||||||||||||
| RSU(4) | 02/15/19 | 7,317 | $ | 212,120 | |||||||||||||||||||
| RSU(4) | 02/14/20 | 11,819 | $ | 342,633 | |||||||||||||||||||
| RSU(4) | 02/12/21 | 29,047 | $ | 842,073 | |||||||||||||||||||
| CROCE(5) | 02/14/20 | 35,458 | $ | 1,027,927 | |||||||||||||||||||
| CROCE(5) | 02/12/21 | 58,094 | $ | 1,684,145 | |||||||||||||||||||
| TSR(7) | 02/14/20 | 4,205 | $ | 121,903 | |||||||||||||||||||
| TSR(7) | 02/12/21 | 20,066 | $ | 581,713 | |||||||||||||||||||
| R. Jackson | |||||||||||||||||||||||
| NQSO(3) | 02/11/15 | 15,589 | $ | 76.96 | 2/11/2022 | ||||||||||||||||||
| NQSO(3) | 02/12/21 | 55,030 | $ | 25.39 | 2/12/2031 | ||||||||||||||||||
| RSU(4) | 02/15/19 | 5,457 | $ | 158,198 | |||||||||||||||||||
| RSU(4) | 02/14/20 | 17,628 | $ | 511,036 | |||||||||||||||||||
| RSU(4) | 02/12/21 | 27,570 | $ | 799,254 | |||||||||||||||||||
| CROCE(5) | 02/12/21 | 55,140 | $ | 1,598,509 | |||||||||||||||||||
| TSR(7) | 02/14/20 | 6,272 | $ | 181,825 | |||||||||||||||||||
| TSR(7) | 02/12/21 | 19,046 | $ | 552,144 | |||||||||||||||||||
| PhSU(8) | 11/01/19 | 29,558 | $ | 856,886 | |||||||||||||||||||
| (1) | |
| (2) | The dollar amounts shown represent the product of the number of shares or units shown in the column immediately to the left and |
| The |
| The RSU awards vest ratably over a three-year period, subject to continued employment. The unvested portion of the RSU award granted in February |
| 2022 PROXY STATEMENT | ||
| 61 |
Executive Compensation Tables
| (5) | Pursuant to SEC rules, values shown for the |
| (6) | The performance retention incentive (PRI) award vested in four equal annual tranches. The first tranche of the PRI award is still outstanding and subject to a performance |
| Pursuant to SEC rules, the |
| The |
Occidental Petroleum Corporation 43
The following table summarizes, for the named executive officers, the stock awards vested during 2017.2021. No optionNQSO or SAR awards were exercised by the named executive officers in 2017.2021.
PREVIOUSLY GRANTED STOCK AWARDS VESTED IN 2017
| Stock Awards | ||||||||
| Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||
| V. Hollub | 39,100 | $ | 2,361,933 | |||||
| E. Lowe | 27,964 | $ | 1,666,227 | |||||
| M. Backus | 19,866 | $ | 1,205,241 | |||||
| C. Burgher | 0 | $ | 0 | |||||
| G. Vangolen | 16,079 | $ | 964,741 | |||||
| C. Stavros | 26,218 | $ | 1,609,635 | |||||
| PREVIOUSLY GRANTED STOCK AWARDS VESTED IN 2021 | |||||||
| Stock Awards | |||||||
| Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |||||
| V. Hollub | 70,541 | $ | 1,877,096 | ||||
| R. Peterson | 18,394 | $ | 489,464 | ||||
| M. Backus | 19,148 | $ | 509,528 | ||||
| K. Dillon | 18,237 | $ | 485,287 | ||||
| R. Jackson | 17,134 | $ | 455,936 | ||||
| (1) | Amounts shown represent the product of the number of shares vested and the closing price of Occidental’s common stock on the NYSE on either the award’s certification date, for performance-based awards, or the award’s vesting date, for time-vested awards. In each case, the number of shares acquired at vesting and the value realized at vesting do not include any reduction in vested shares or value realized associated with the cancellation of shares to satisfy taxes. |
Nonqualified Deferred Compensation
| Supplemental Retirement Plan II |
Employees whose participation in Occidental’s tax-qualified defined contribution plans is limited by applicable tax laws are eligible to participate in Occidental’s Supplemental Retirement PlanSRP II, (SRP II), which provides additional retirement benefits outside of those limitations.
Annual plan allocations for each participant restore the amounts that would have accrued for salary, ACI award amounts and Annual Cash Incentivebonus amounts, if any, under the qualified plans, but for the tax law limitations. Account balances are fully vested after three years of service and are payable following separation from service, or upon attainment of a specified age elected by the participant, as described below. Except for Mr. Burgher, eachparticipant. Each of the named executive officers is fully vested in his or her aggregate balance shown on page 45.
63.
Interest on SRP II accounts is allocated daily to each participant’s account. The amount of interest earnings is calculated using a rate equal to the five-year U.S. Treasury Note rate on the last business day of the processing month plus 2%, on a daily basis with monthly compounding.
|
Under the Modified Deferred Compensation Plan (MDCP),
Under the MDCP, the maximum amount of an executive officer’s salary or Annual Cash IncentiveACI award payment that may be deferred for any one year is limited to $75,000.$150,000. A participant’s overall plan balance must be less than $1$2 million at the end of any given year to enable a participant to defer compensation for the subsequent year. Deferred amounts earn interest at a rate equal to the five-year U.S. Treasury Note rate plus 2%, except for amounts deferred prior to 1994, which continue to earn interest at a minimum interest rate.
| | ||
| 62 |
Executive Compensation Tables
The following table sets forth the 20172021 contributions, earnings, withdrawals and balances under the SRP II and the MDCP, to the extent the named executive officers participateparticipated in such plans. The footnotes provide information about other amounts that were reported as earned in the Summary Compensation Table on page 3758 for 20172021 and prior years.
2018 Notice of Annual Meeting and Proxy Statement 44
NONQUALIFIED DEFERRED COMPENSATION
| Name | Plan | Executive Contributions in 2017(1) | Occidental Contributions in 2017(2) | Aggregate Earnings in 2017 | Aggregate Withdrawals/ Distributions in 2017 | Aggregate Balance at 12/31/17(3) | ||||||||||||||||
| V. Hollub | SRP II | $ | — | $ | 427,711 | $ | 46,831 | $ | 0 | $ | 1,427,961 | |||||||||||
| MDCP | $ | 60,297 | $ | 4,221 | $ | 10,811 | $ | 0 | $ | 322,415 | ||||||||||||
| E. Lowe | SRP II | $ | — | $ | 180,469 | $ | 67,180 | $ | 0 | $ | 1,871,966 | |||||||||||
| MDCP | $ | 0 | $ | 0 | $ | 38,987 | $ | 0 | $ | 1,042,213 | ||||||||||||
| M. Backus | SRP II | $ | — | $ | 200,470 | $ | 18,480 | $ | 0 | $ | 580,944 | |||||||||||
| MDCP | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| C. Burgher | SRP II | $ | — | $ | 35,621 | $ | 274 | $ | 0 | $ | 35,895 | |||||||||||
| MDCP | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
| G. Vangolen | SRP II | $ | — | $ | 155,437 | $ | 39,035 | $ | 0 | $ | 1,110,391 | |||||||||||
| MDCP | $ | 75,000 | $ | 5,250 | $ | 34,044 | $ | 0 | $ | 951,776 | ||||||||||||
| C. Stavros | SRP II | $ | — | $ | 130,967 | $ | 43,748 | $ | 0 | $ | 1,196,767 | |||||||||||
| MDCP | $ | 50,000 | $ | 3,500 | $ | 27,322 | $ | 0 | $ | 739,242 | ||||||||||||
| NONQUALIFIED DEFERRED COMPENSATION | ||||||||||||||||||
| Name | Plan | Executive Contributions in 2021(1) | Occidental Contributions in 2021(2) | Aggregate Earnings in 2021 | Aggregate Withdrawals/ Distributions in 2021(3) | Aggregate Balance at 12/31/21(4) | ||||||||||||
| V. Hollub | SRP II | $ | – | $ | 285,056 | $ | 88,372 | $ | – | $ | 3,354,530 | |||||||
| MDCP | $ | – | $ | – | $ | 9,777 | $ | 21,197 | $ | 335,202 | ||||||||
| R. Peterson | SRP II | $ | – | $ | 132,873 | $ | 43,243 | $ | – | $ | 1,648,309 | |||||||
| MDCP | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| M. Backus | SRP II | $ | – | $ | 160,800 | $ | 42,915 | $ | – | $ | 1,649,129 | |||||||
| MDCP | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| K. Dillon | SRP II | $ | – | $ | 149,636 | $ | 56,226 | $ | – | $ | 2,127,276 | |||||||
| MDCP | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| R. Jackson | SRP II | $ | – | $ | 143,223 | $ | 36,769 | $ | – | $ | 1,419,663 | |||||||
| MDCP | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| (1) | No employee contributions are permitted to the SRP |
| (2) | Amounts represent Occidental’s |
| (3) | |
| (4) | The aggregate balance for each named executive officer who participates in the SRP II and/or the MDCP, as applicable, reflects the cumulative value, as of December 31, |
Executive Severance and Change in Control
Occidental adopted the Severance Plan and the CIC Severance Plan (each as defined below) to allow Occidental’s executives to continue to exercise their judgment and perform their responsibilities without the potential for distraction that can arise from concerns regarding their personal circumstances. In reviewing each plan, the Compensation Committee consulted with its independent compensation consultant, Meridian Compensation Partners, LLC, to develop market-based severance benefits that are competitive within the oil and gas industry and that reflect broader U.S. industry practices.
Receipt of any severance benefits is subject to the executive’s execution of a release of any claims against Occidental, as well as compliance with any restrictive covenants that the Compensation Committee determines in its discretion.
Executive Severance Plan
In March 2020, Occidental adopted the Occidental Petroleum Corporation Executive Severance Plan (the Severance Plan), which is applicable to Occidental’s executive officers. Occidental previously did not maintain any severance arrangements for its executive officers.
The Severance Plan provides severance benefits in the event that an eligible executive’s employment with Occidental and its subsidiaries is terminated other than for “cause” (as defined in the Severance Plan). The Severance Plan does not provide benefits upon a resignation by an executive for any reason. The severance benefits provided under the Severance Plan are as follows:
| ► | Cash Severance. Cash severance equal to 1.5 times (or, in the case of Occidental’s Chief Executive Officer, 2.0 times) the sum of (A) the executive’s base salary and (B) the executive’s annual bonus for the year of termination. For terminations on or before December 31, 2021, (i) base salary was deemed to be the higher of the executive’s base salary in effect on March 1, 2020 and that in effect on the termination date and (ii) the executive’s annual bonus for the year of termination was deemed to be the actual bonus earned for the year of termination based on actual performance. For terminations after December 31, 2021, the executive’s base salary on the termination date and target bonus for the year of termination will apply. |
| 2022 PROXY STATEMENT | ||
| 63 |
Executive Compensation Tables
| ► | Pro-Rata Bonus. The pro-rata portion of the executive’s annual bonus for the year of termination, determined based on (x) actual performance for the year of termination, if the termination date was on or before December 31, 2021, or (y) target bonus, if the termination date is after December 31, 2021. |
| ► | Welfare Benefits. Continued participation of the executive (and eligible dependents) in the basic life, medical and dental plans in which the executive participated immediately before the termination date at the same rates and levels that the executive participated prior to termination, in accordance with the terms of such plans for two years following the termination date. |
| ► | Accelerated Vesting of Service Condition Under Long-Term Incentive Awards. The service-based vesting condition of any long-term incentive award would vest (x) in full, if the executive’s termination date was on or before December 31, 2021, or (y) on a pro-rata basis, if the executive’s termination date is after December 31, 2021. If the award is also subject to performance-based vesting conditions, the award (or the pro-rata portion of such award, as applicable) would continue to be subject to the satisfaction of the applicable performance conditions. Any individual performance goals that are not based on objective financial performance criteria would be deemed earned at target performance. |
| ► | Outplacement. Outplacement services for up to nine months following the termination date. |
The Severance Plan also includes a “net best after tax provision” such that if any of the executive’s payments under the Severance Plan or otherwise would be subject to “golden parachute” excise taxes under the Internal Revenue Code, the payments to the executive will be reduced in order to limit or avoid the “golden parachute” excise tax if and to the extent such reduction would produce an expected better after-tax result for the executive.
Change in Control Severance Plan
In May 2020, Occidental adopted the Occidental Petroleum Corporation Executive Change in Control Severance Plan (the CIC Severance Plan), which provides enhanced severance benefits to Occidental’s executive officers upon qualifying terminations of employment within two years following a Change in Control (as defined in the CIC Severance Plan).
The CIC Severance Plan complements Occidental’s Executive Severance Plan, which provides severance benefits upon qualifying terminations before a Change in Control and after the two-year protection period following the Change in Control but does not provide for enhanced change in control protections.
Severance benefits are payable under the CIC Severance Plan if an eligible executive’s employment with Occidental and its subsidiaries is terminated within two years following a Change in Control either (a) by Occidental (other than for “cause” (as defined in the CIC Severance Plan)) or (b) by the eligible executive for “good reason” (as defined in the CIC Severance Plan). The severance benefits provided under the CIC Severance Plan are as follows:
| ► | Cash Severance. Cash severance equal to 2.00 times (or, in the case of Occidental’s Chief Executive Officer, 2.99 times) the sum of (A) the executive’s base salary (based on the highest base salary in effect at any time during the three-year period preceding the Change in Control or at any time on or after the Change in Control) and (B) the executive’s target annual bonus. |
| ► | Pro-Rata Bonus. The pro-rata portion of the executive’s annual bonus for the year of termination, determined based on the greater of (A) the executive’s target annual bonus and (B) the amount of such bonus that would have been due for the full year based on actual results for such year, had the executive remained employed through the payment date. |
| ► | Welfare Benefits. Continued participation of the executive (and eligible dependents) in the basic life, medical and dental plans in which the executive participated immediately before the termination date at the same rates and levels that the executive participated prior to termination, in accordance with the terms of such plans for two years following the termination date. |
| ► | Accelerated Vesting of Long-Term Incentive Awards. Vesting of all outstanding long-term incentive awards with performance-based awards vesting at the greater of target performance and actual performance, except that any individual performance goals that are not based on objective financial performance criteria would be deemed earned at target performance. |
| ► | Outplacement. Outplacement services for up to nine months following the termination date. |
Like the Severance Plan, the CIC Severance Plan also includes a “net best after tax provision.”
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Executive Compensation Tables
Potential Payments upon Termination or Change in Control
Payments and other benefits provided to named executive officers in various termination circumstances or in connection with a change in control are subject to certain policies, plans and agreements. The material terms of these arrangements are summarized below. Except as described in this summary and in the Potential Payments table,CD&A, Occidental does not have any other agreements or plans that will require compensation to be paid to named executive officers in the event of a termination of employment or a change in control.
Golden Parachute Policy.Occidental’s Golden Parachute Policy provides that, subject to certain exceptions, Occidental will not grant Golden Parachute Benefits (as defined in the policy) to any senior executive that exceed 2.99 times his or her salary plus Annual Cash IncentiveACI pay, unless the grant of such benefits is approved by a vote of the corporation’s stockholders.Occidental’s shareholders. The complete Golden Parachute Policy is available at www.oxy.com.
Notice and Severance Pay Plan.Under Occidental’s Notice and Severance Pay Plan, employees terminated in certain circumstances without cause or as a result of a change in control are eligible for up to 12 months’ base salary depending on years of service, two months of contributions pursuantOutstanding Equity Awards. Awards granted to the Savings Plan and the SRP II, and continued medical and dental coverage for the 12-month notice and severance period at the active employee rate.
Outstanding Equity Awards.Awardsnamed executive officers since 2015 (those granted under Occidental’sthe 2015 LTIPLTIP) are subject to double-trigger vesting upon a “change in control” (as defined in the 2015 LTIP). Payout under each of the outstanding equity awards based on various termination circumstances or in connection with a change in control are described in more detail in the footnotes to the Potential Payments table on page 47.67.
Separation Agreement.Occidental entered into a separation agreement with Mr. Stavros in connection with his retirement as Senior Vice President and Chief Financial Officer. Pursuant to the separation agreement, Mr. Stavros is entitled to receive (i) twenty-six bi-weekly payments of $26,923; (ii) a lump sum payment of $700,000, payable as of June 30, 2018; and (iii) $8,000 in lieu of tax planning assistance for the 2017 tax year. These payments are subject to compliance with the terms of the separation agreement. Mr. Stavros received a prorated Annual Cash Incentive award for 2017. In addition, Mr. Stavros is eligible to participate in Occidental’s medical and dental plans at active participant rates through June 30, 2018. The separation agreement did not affect the terms of Mr. Stavros’s outstanding equity awards. The value of Mr. Stavros’s RSU awards that accelerated upon his retirement is included in the Previously Granted Stock Awards Vested in 2017 table on page 44. Mr. Stavros’s outstanding equity awards, as reduced for any forfeitures, are reported in the Outstanding Equity Awards table beginning on page 41. Payout of these awards remains subject to the attainment of applicable performance goals, as described in the footnotes to the Potential Payments table on page 47
Occidental Petroleum Corporation 45
|
In the table that follows, payments and other benefits provided to the active named executive officers in connection with various termination and change in control situations are set out as if the conditions for payment had occurred and the applicable triggering events took place on December 31, 2017.
2021, when the closing price of Occidental’s common stock was $28.99. The amounts shown in the following table are in addition to the payments and benefits that are potentially available to all full-time salaried U.S. dollar payroll employees, such as amounts vested under the Savings Plan and other tax-qualified retirement plans, amounts vested under Occidental’s nonqualified deferred compensation plans, payment for accrued vacationPTO up to a maximum accrual ceiling of 296350 hours, and disability benefits, among others.
Actual amounts to be paid will depend on several factors, such as the date of each named executive officer’s separation from Occidental or the occurrence of an actuala change in control event, Occidental’s ultimate achievement of performance goals underlying theperformance awards and the price of Occidental’s common stock when such awards are earned, if at all. The disclosures below do not take into consideration any requirements under Section 409A of the Internal Revenue Code, which could affect, among other things, the timing of payments and distributions.
| POTENTIAL PAYMENTS | |||||||||||||||||||
| Name/Type of Award(1) | Retirement with Occidental Consent | Death or Disability | Termination for Cause; Voluntary Termination | Involuntary Termination without Cause(2) | Change in Control | Change in Control and Qualifying Termination(3) | |||||||||||||
| V. Hollub | |||||||||||||||||||
| RSU Awards(4) | $ | 1,970,363 | $ | 1,970,363 | $ | – | $ | 4,946,593 | $ | – | $ | 4,946,593 | |||||||
| CROCE Awards(5) | $ | 5,057,306 | $ | 3,838,914 | $ | – | $ | 7,854,725 | $ | – | $ | 7,854,725 | |||||||
| PRI Award(6) | $ | – | $ | – | $ | – | $ | – | $ | 249,778 | $ | 249,778 | |||||||
| TSR Awards(7) | $ | 422,729 | $ | 422,729 | $ | – | $ | 1,268,160 | $ | – | $ | 5,517,609 | |||||||
| NQSOs(8) | $ | 145,325 | $ | 520,034 | $ | – | $ | 520,034 | $ | – | $ | 520,034 | |||||||
| SAR Award(9) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | |||||||
| Cash Severance(10) | $ | – | $ | – | $ | – | $ | 7,500,000 | $ | – | $ | 8,521,500 | |||||||
| Pro-Rata Bonus(10) | $ | 2,400,000 | $ | 2,400,000 | $ | – | $ | 2,400,000 | $ | – | $ | 2,400,000 | |||||||
| Health & Welfare Benefits(10) | $ | – | $ | – | $ | 38,590 | $ | – | $ | 38,590 | |||||||||
| Outplacement(10) | $ | – | $ | – | $ | – | $ | 30,000 | $ | – | $ | 30,000 | |||||||
| Total | $ | 9,995,723 | $ | 9,152,040 | $ | – | $ | 24,558,102 | $ | 249,778 | $ | 30,078,829 | |||||||
| 2022 PROXY STATEMENT |
| |
| 65 |
POTENTIAL PAYMENTS
| Name/Type of Award(1),(2) | Retirement with Occidental Consent | Disability, Death or Termination without Cause | Change in Control | Change in Control and Qualifying Termination | ||||||||||||
| V. Hollub | ||||||||||||||||
| RSI Awards(3) | $ | — | $ | — | $ | 1,357,186 | $ | 1,357,186 | ||||||||
| RSU Awards(4) | $ | 2,285,596 | $ | 2,285,596 | $ | — | $ | 2,285,596 | ||||||||
| ROCE Award(5) | $ | 507,738 | $ | 338,689 | $ | — | $ | 1,269,309 | ||||||||
| PRI Award(6) | $ | 920,308 | $ | 920,308 | $ | 634,655 | $ | 1,903,964 | ||||||||
| TSR Awards(7) | $ | 9,729,602 | $ | 7,759,418 | $ | — | $ | 15,613,489 | ||||||||
| Total | $ | 13,443,244 | $ | 11,304,011 | $ | 1,991,841 | $ | 22,429,544 | ||||||||
| E. Lowe | ||||||||||||||||
| RSI Awards(3) | $ | — | $ | — | $ | 3,636,005 | $ | 3,636,005 | ||||||||
| RSU Awards(4) | $ | 1,201,763 | $ | 1,201,763 | $ | — | $ | 1,201,763 | ||||||||
| PRI Award(6) | $ | 736,232 | $ | 736,232 | $ | 507,738 | $ | 1,523,141 | ||||||||
| TSR Awards(7) | $ | 3,994,950 | $ | 3,194,708 | $ | — | $ | 5,954,895 | ||||||||
| ROA Award(8) | $ | — | $ | — | $ | — | $ | 203,154 | ||||||||
| ROA-MENA Award(9) | $ | 1,584,206 | $ | 1,056,800 | $ | — | $ | 812,396 | ||||||||
| Total | $ | 7,517,151 | $ | 6,189,503 | $ | 4,143,743 | $ | 13,331,354 | ||||||||
| M. Backus | ||||||||||||||||
| RSI Awards(3) | $ | — | $ | — | $ | 1,937,184 | $ | 1,937,184 | ||||||||
| RSU Awards(4) | $ | 1,288,092 | $ | 1,288,092 | $ | — | $ | 1,288,092 | ||||||||
| ROCE Award(5) | $ | 223,484 | $ | 149,088 | $ | — | $ | 558,564 | ||||||||
| PRI Award(6) | $ | 404,983 | $ | 404,983 | $ | 279,319 | $ | 837,809 | ||||||||
| TSR Awards(7) | $ | 3,023,080 | $ | 2,403,452 | $ | — | $ | 4,703,044 | ||||||||
| Total | $ | 4,939,639 | $ | 4,245,615 | $ | 2,216,503 | $ | 9,324,693 | ||||||||
| C. Burgher | ||||||||||||||||
| RSU Award(4) | $ | 613,072 | $ | 613,072 | $ | — | $ | 613,072 | ||||||||
| Total | $ | 613,072 | $ | 613,072 | $ | — | $ | 613,072 | ||||||||
| G. Vangolen | ||||||||||||||||
| RSI Awards(3) | $ | — | $ | — | $ | 365,575 | $ | 365,575 | ||||||||
| RSU Awards(4) | $ | 983,729 | $ | 983,729 | $ | — | $ | 983,729 | ||||||||
| ROCE Award(5) | $ | 243,741 | $ | 162,641 | $ | — | $ | 609,316 | ||||||||
| PRI Award(6) | $ | 441,739 | $ | 441,739 | $ | 304,658 | $ | 913,900 | ||||||||
| TSR Awards(7) | $ | 2,896,238 | $ | 2,307,547 | $ | — | $ | 4,436,247 | ||||||||
| Total | $ | 4,565,447 | $ | 3,895,656 | $ | 670,233 | $ | 7,308,767 | ||||||||
2018 Notice of Annual Meeting and Proxy Statement 46
Executive Compensation Tables
| Name/Type of Award(1) | Retirement with Occidental Consent | Death or Disability | Termination for Cause; Voluntary Termination | Involuntary Termination without Cause(2) | Change in Control | Change in Control and Qualifying Termination(3) | |||||||||||||
| R. Peterson | |||||||||||||||||||
| RSU Awards(4) | $ | 554,492 | $ | 554,492 | $ | – | $ | 1,438,078 | $ | – | $ | 1,438,078 | |||||||
| CROCE Award(5) | $ | 532,837 | $ | 532,837 | $ | – | $ | 1,598,509 | $ | – | $ | 1,598,509 | |||||||
| PRI Award(6) | $ | – | $ | – | $ | – | $ | – | $ | 74,939 | $ | 74,939 | |||||||
| TSR Awards(7) | $ | 161,051 | $ | 161,051 | $ | – | $ | 483,126 | $ | – | $ | 1,764,737 | |||||||
| NQSOs(8) | $ | 55,364 | $ | 198,108 | $ | – | $ | 198,108 | $ | – | $ | 198,108 | |||||||
| Phantom Share Unit Award(11) | $ | – | $ | 1,236,916 | $ | – | $ | 1,285,330 | $ | – | $ | 1,285,330 | |||||||
| Cash Severance(10) | $ | – | $ | – | $ | – | $ | 2,535,000 | $ | – | $ | 2,600,000 | |||||||
| Pro-Rata Bonus(10) | $ | 1,040,000 | $ | 1,040,000 | $ | – | $ | 1,040,000 | $ | – | $ | 1,040,000 | |||||||
| Health & Welfare Benefits(10) | $ | – | $ | – | $ | – | $ | 52,548 | $ | – | $ | 52,548 | |||||||
| Outplacement(10) | $ | – | $ | – | $ | – | $ | 30,000 | $ | – | $ | 30,000 | |||||||
| Total | $ | 2,343,744 | $ | 3,723,404 | $ | – | $ | 8,660,699 | $ | 74,939 | $ | 10,082,249 | |||||||
| M. Backus | |||||||||||||||||||
| RSU Awards(4) | $ | 548,201 | $ | 548,201 | $ | – | $ | 1,398,941 | $ | – | $ | 1,398,941 | |||||||
| CROCE Awards(5) | $ | 1,616,251 | $ | 1,268,140 | $ | – | $ | 2,758,051 | $ | – | $ | 2,758,051 | |||||||
| PRI Award(6) | $ | – | $ | – | $ | – | $ | – | $ | 109,930 | $ | 109,930 | |||||||
| TSR Awards(7) | $ | 172,542 | $ | 172,542 | $ | – | $ | 517,624 | $ | – | $ | 1,605,843 | |||||||
| NQSOs(8) | $ | 59,317 | $ | 212,260 | $ | – | $ | 212,260 | $ | – | $ | 212,260 | |||||||
| Cash Severance(10) | $ | – | $ | – | $ | – | $ | 3,015,000 | $ | – | $ | 3,060,000 | |||||||
| Pro-Rata Bonus(10) | $ | 1,280,000 | $ | 1,280,000 | $ | – | $ | 1,280,000 | $ | – | $ | 1,280,000 | |||||||
| Health & Welfare Benefits(10) | $ | – | $ | – | $ | – | $ | 19,040 | $ | – | $ | 19,040 | |||||||
| Outplacement(10) | $ | – | $ | – | $ | – | $ | 30,000 | $ | – | $ | 30,000 | |||||||
| Total | $ | 3,676,311 | $ | 3,481,143 | $ | – | $ | 9,230,916 | $ | 109,930 | $ | 10,474,065 | |||||||
| K. Dillon | |||||||||||||||||||
| RSU Awards(4) | $ | 556,869 | $ | 556,869 | $ | – | $ | 1,396,825 | $ | – | $ | 1,396,825 | |||||||
| CROCE Awards(5) | $ | 1,589,348 | $ | 1,247,035 | $ | – | $ | 2,712,072 | $ | – | $ | 2,712,072 | |||||||
| TSR Awards(7) | $ | 169,675 | $ | 169,675 | $ | – | $ | 508,999 | $ | – | $ | 1,797,554 | |||||||
| NQSOs(8) | $ | 58,331 | $ | 208,721 | $ | – | $ | 208,721 | $ | – | $ | 208,721 | |||||||
| Cash Severance(10) | $ | – | $ | – | $ | – | $ | 2,932,500 | $ | – | $ | 2,950,000 | |||||||
| Pro-Rata Bonus(10) | $ | 1,280,000 | $ | 1,280,000 | $ | – | $ | 1,280,000 | $ | – | $ | 1,280,000 | |||||||
| Health & Welfare Benefits(10) | $ | – | $ | – | $ | – | $ | 34,401 | $ | – | $ | 34,401 | |||||||
| Outplacement(10) | $ | – | $ | – | $ | – | $ | 30,000 | $ | – | $ | 30,000 | |||||||
| Total | $ | 3,654,223 | $ | 3,462,300 | $ | – | $ | 9,103,518 | $ | – | $ | 10,409,573 | |||||||
| R. Jackson | |||||||||||||||||||
| RSU Awards(4) | $ | 570,233 | $ | 570,233 | $ | – | $ | 1,468,488 | $ | – | $ | 1,468,488 | |||||||
| CROCE Award(5) | $ | 532,837 | $ | 532,837 | $ | – | $ | 1,598,509 | $ | – | $ | 1,598,509 | |||||||
| TSR Awards(7) | $ | 161,051 | $ | 161,051 | $ | – | $ | 483,126 | $ | – | $ | 1,822,485 | |||||||
| NQSOs(8) | $ | 55,364 | $ | 198,108 | $ | – | $ | 198,108 | $ | – | $ | 198,108 | |||||||
| Phantom Share Unit Award(11) | $ | – | $ | 824,621 | $ | – | $ | 856,886 | $ | – | $ | 856,886 | |||||||
| Cash Severance(10) | $ | – | $ | – | $ | – | $ | 2,535,000 | $ | – | $ | 2,600,000 | |||||||
| Pro-Rata Bonus(10) | $ | 1,040,000 | $ | 1,040,000 | $ | – | $ | 1,040,000 | $ | – | $ | 1,040,000 | |||||||
| Health & Welfare Benefits(10) | $ | – | $ | – | $ | – | $ | 49,284 | $ | – | $ | 49,284 | |||||||
| Outplacement(10) | $ | – | $ | – | $ | – | $ | 30,000 | $ | – | $ | 30,000 | |||||||
| Total | $ | 2,359,485 | $ | 3,326,850 | $ | – | $ | 8,259,401 | $ | – | $ | 9,663,760 | |||||||
| (1) | The treatment of outstanding equity awards in connection with each termination scenario specified in |
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Executive Compensation Tables
Type of Award | Retirement with Occidental Consent | Death or Disability | Termination without Cause(2) | Change in | Change in | Qualifying Termination(3) | |||||
| Award vests on a pro-rata basis. | Award vests on a pro-rata basis. | Award vests in full. | No effect. | Award vests in full. | |||||||
| PRI | Award vests on a pro-rata basis, subject to actual performance. | Award vests on a pro-rata basis, subject to actual performance. | |||||||||
| Award vests | Award is converted into restricted shares, subject to continued service vesting. | Award vests | |||||||||
CROCE, TSR | Award vests on a pro-rata basis, subject to actual performance; if retirement occurs on or after the | Award vests on a pro-rata basis, subject to actual performance. | Award vests in full, subject to actual performance. | Award is converted into restricted shares at target level, subject to continued service vesting. | Award vests at | ||||||
| Award vests on a pro-rata | Award vests | Award vests | No effect. | Award vests in full. |
| (2) |
| (3) | A qualifying termination means a termination by Occidental other than for “cause” or a termination by the |
| (4) | The dollar amount shown represents the value realized upon the vesting of the RSU awards upon the occurrence of the applicable potential payment event, which is equal to the product of Occidental’s year-end closing stock price and the number of shares that vest in accordance with the terms of the applicable award. |
| (5) | ||
| (6) | No payout amount is shown in the case of |
| (7) | In the case of the grantee’s retirement, disability, death or termination without cause, the dollar amount shown represents the value realized upon the vesting of the 2021 TSR awards, which is equal to the product of the year-end closing stock price and the number of shares that vest in accordance with the terms of the |
| 2021. No payout of the | ||
| (8) | The dollar amount shown represents the payout of the 2021 NQSO awards as Occidental’s closing stock price on December 31, 2021 was in excess of the applicable strike price of the 2021 NQSO awards. No payout is shown for the 2015 NQSO awards and the 2020 NQSO awards as Occidental’s closing stock price on December 31, 2021 was not in excess of the applicable strike price of those awards. The 2015 NQSO award vested ratably over a | |
| (9) | No payout of the SAR award is shown in | |
| (10) | For more information, see “Executive Compensation Tables – Executive Severance and | |
| (11) | The dollar amount shown represents the value realized upon the |
| 2022 PROXY STATEMENT | ||
| 67 |
Occidental Petroleum Corporation 47
The 2017For 2021, the annual total compensation of the median compensated employee of Occidental (other than Ms. Hollub, Occidental’s Chief Executive Officer) was $115,552;$157,013; the annual total compensation of Ms. Hollub for purposes of this pay ratio disclosure was $12,696,788;$11,084,727; and the ratio of these amounts is approximately 11071 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on Occidental’s payroll records and the methodology described below.
Pay Ratio Methodology.To identify the median “employee”“median employee” (as defined by SEC rules), as well as to determine the annual total compensation of the median employee, we used certain permitted assumptions, adjustments and estimates, as described further below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
As permitted by SEC rules, for the 2021 pay ratio reported above, we used the same median employee that we used for our 2020 pay ratio, as we believe there has been no change in our employee population or employee compensation arrangements during the last fiscal year that would significantly impact our pay ratio disclosure.
Employee Population.We identified the median employee used for 2020 and 2021 from Occidental’s employee population as of October 1, 2017.2020. After excluding 613 employees underpursuant to the “dede minimis exemption”exemption (as described below), Occidental’s employee population consisted of 6,960 employees located in11,664 employees. Under the U.S.; 557 in Colombia; 2,647 in Oman; and 466 in Qatar. For purposes of identifying the median employee,de minimis exemption, Occidental was permitted to exclude up to 5% of its total employees who are non-U.S. employees. Occidental relied on this exemption to exclude the employee populations of the following jurisdictions, which collectively accounted for less than 5% of Occidental’s total employee population of 10,97812,277 as of October 1, 2017: Abu Dhabi (64)2020: Chile (105); Belgium (2)Colombia (506); Bolivia (65); Brazil (1); Canada (88); Chile (111); Hong Kong (4); Japan (2); Libya (1); Mexico (3); The NetherlandsCôte d’Ivoire (1); and Singapore (6)the Netherlands (1).
Compensation Measure to Identify Median Employee.To identify the median employee, we used the annual salary of each employee as of October 1, 2017,2020, plus any annual bonus paid to each employee during 2017,2020, each as reported in Occidental’s payroll systems. We did not annualize the salary of any temporary employees.
Total Compensation in 2017.Once the median employee was identified, we2021. We calculated the median employee’s compensation for 20172021 in accordance with the requirements of Item 402 of Regulation S-K, which is equal to the amount of the median employee'semployee’s compensation for 20172021 that would have been reported in the Summary Compensation Table on page 37,58, plus the amount ofOccidental’s contributions for the median employee'semployee’s non-discriminatory health and welfare benefits. With respect to the annual total compensation of Ms. Hollub, we used the amount reported in the “Total” column of the Summary Compensation Table on page 37,58, plus the amount ofOccidental’s contributions for Ms. Hollub'sHollub’s non-discriminatory health and welfare benefits. The lower ratio this year is in large part due to COVID-related pay reductions at the CEO level that have been partially restored for 2022.
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2018 Notice of Annual Meeting and Proxy Statement 48
NON-EMPLOYEE DIRECTOR COMPENSATIONNon-Employee Director Compensation
The Governance Committee periodically reviews non-employee director compensation and makes recommendations regarding changes to the Board. Following the sudden and significant decline in global commodity prices in early 2020, the Board acted in March and May 2020 to reduce all components of non-employee director compensation, toresulting in a 30% decrease from 2019 levels for the Board.2020-2021 term. In 2017,May 2021, the Governance Committee engagedreviewed non-employee director compensation with the assistance of Meridian Partners, LLC (Meridian) to assist the Committee inas its review.independent compensation consultant. Meridian performed a robust review of Occidental’s non-employee director compensation program, which included a detailed comparison of Occidental’s non-employee director compensation program and practices against those of Occidental’s peer companies (as defined on page 29)44) and against a broader comparator group of Fortune 250the largest 200 companies based on market capitalization. Based onin the market data presented by MeridianS&P 500. After careful consideration and the Governance Committee’s analysis,discussion, the Governance Committee determined that the program was competitive and aligned with market practices and recommended to the Board that no changes be made to the program. Non-employeepartially restore non-employee director compensation has remained unchanged since 2014.to an amount approximately 11% less than 2019 levels.
The non-employee directors receive a combination of cash, in the form of an annual retainer payable on a monthly basis, and stock-based compensation. Occidental does not provide option awards;awards, non-equity incentive awards;awards or retirement plans for non-employee directors. The Independentindependent Chairman of the Board, the independent Vice Chairman of the Board and the Committeecommittee chairs receive additional compensation for their service due to the increased responsibilities that accompany these positions. Ms. Hollub does not receive any compensation for her service as a director.
The following table describes the components of the 2017 non-employee director compensation program:
program for the 2021-2022 term, as adjusted as of May 2021:
| Compensation Element | 2021 Annual | |||
| $ | 110,000 for non-employee directors | |||
| $ | 140,000 for Chairman of the Board | |||
| Annual Equity Award | $ | 200,000 for non-employee directors | ||
| $ | 250,000 for Vice Chairman of the Board | |||
| $ | 310,000 for Chairman of the Board | |||
| Board or Committee Meeting Fees | None | |||
| Committee Chair Additional Annual Equity Award | $ | 25,000 for each |
| * | As approved by the Board in May 2020, amounts paid from January 1, 2021 through May 6, 2021 in respect of (i) the annual cash retainer reflected annual retainer levels of $87,500 for non-employee directors and $108,500 for the Chairman of the Board; (ii) the annual equity award reflected levels of $157,500 for non-employee directors, $192,500 for the Vice Chairman of the Board and $234,500 for the Chairman of the Board; and (iii) the additional annual equity award for committee chairs of $17,500 for each committee. |
| 2022 PROXY STATEMENT | ||
| 69 |
| Non-Employee Director Compensation Annual Equity Award |
The Board believes that director and stockholdershareholder interests should be aligned over the long term. In furtherance of this objective, the majority of non-employee director compensation is equity-based compensation. Directors may elect to receive their annual equity award in shares of common stock or in deferred common stock units.
Common Stock Award.Pursuant to the terms of the award, the director receives shares of common stock that are fully vested at grant but subject to transfer restrictions. 50% of the shares may not be sold or transferred until the third anniversary of the grant date, and the remaining 50% may not be sold or transferred until the date of the director’s separation from service; provided, however, that all of the shares become transferable in the event of certain change in control events or the director’s separation from service.
Deferred Common Stock Unit Award.Pursuant to the terms of the award, the director receives deferred stock units that are fully vested at grant but subject to transfer restrictions. Each deferred stock unit is equivalent to one share of common stock and payable in shares of common stock upon the satisfaction of the deferral period. 50% of the deferred stock units are payable upon the third anniversary of the grant date, and the remaining 50% are payable on the date of the director’s separation from service; provided, however, that all of the deferred stock units are payable in the event of certain change in control events or the director’s separation from service.
| All Other Compensation |
Directors are eligible to participate in the Occidental Petroleum Corporation Matching Gift Program, which matches contributions made by employees and directors to educational institutions and organizations, as well as arts and cultural organizations. The limit for such matching contributions is $10,000. While this program was $10,000suspended in 2017.2020 as part of cost-cutting measures taken by the company following the onset of the COVID-19 pandemic, Occidental reinstated the program as of December 15, 2021. Occidental also reimburses non-employee directors for expenses related to their Board service, including hotel, airfare, ground transportation and meals.
Stock Ownership Guidelines
Each non-employee director is expected to beneficially own a number of shares of common stock or deferred stock units of Occidental Petroleum Corporation 49having a market price equal to at least six times the annual cash retainer for non-employee directors within five years of his or her election to the Board. A director who does not meet the minimum ownership guideline may not sell any shares of Occidental common stock until he or she meets the ownership guideline and would continue to meet the ownership guideline following any such sale. As of March 1, 2022, each of our non-employee directors was in compliance with these guidelines.
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Non-Employee Director Compensation
The table below summarizes the total compensation for each of the non-employee directors in 2017.2021.
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | All Other Compensation(2) | Total | ||||||||||||
| Spencer Abraham | $ | 125,000 | $ | 225,000 | $ | 8,750 | $ | 358,750 | ||||||||
| Howard I. Atkins | $ | 125,000 | $ | 225,000 | $ | 1,181 | $ | 351,181 | ||||||||
| Eugene L. Batchelder | $ | 155,000 | $ | 335,000 | $ | 629 | $ | 490,629 | ||||||||
| John E. Feick | $ | 125,000 | $ | 250,000 | $ | 2,514 | $ | 377,514 | ||||||||
| Margaret M. Foran | $ | 125,000 | $ | 250,000 | $ | 10,546 | $ | 385,546 | ||||||||
| Carlos M. Gutierrez | $ | 125,000 | $ | 250,000 | $ | — | $ | 375,000 | ||||||||
| William R. Klesse | $ | 125,000 | $ | 225,000 | $ | — | $ | 350,000 | ||||||||
| Jack B. Moore | $ | 116,667 | $ | 225,000 | $ | 1,257 | $ | 342,924 | ||||||||
| Avedick B. Poladian | $ | 125,000 | $ | 250,000 | $ | 12,441 | $ | 387,441 | ||||||||
| Elisse B. Walter | $ | 125,000 | $ | 225,000 | $ | 10,000 | $ | 360,000 | ||||||||
| COMPENSATION OF DIRECTORS | ||||||||||||||||
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(1)(2) | All Other Compensation | Total | ||||||||||||
| Stephen I. Chazen | $ | 126,875 | $ | 335,005 | $– | $ | 461,880 | |||||||||
| Andrew F. Gould | $ | 100,625 | $ | 225,024 | $– | $ | 325,649 | |||||||||
| Nicholas Graziano(3) | $ | 14,583 | $ | – | $– | $ | 14,583 | |||||||||
| Carlos M. Gutierrez | $ | 100,625 | $ | 225,024 | $– | $ | 325,649 | |||||||||
| Gary Hu(2) | $ | 93,333 | $ | 252,524 | $– | $ | 345,857 | |||||||||
| William R. Klesse | $ | 100,625 | $ | 200,018 | $– | $ | 300,643 | |||||||||
| Andrew N. Langham(3) | $ | 100,625 | $ | 200,018 | $– | $ | 300,643 | |||||||||
| Jack B. Moore | $ | 100,625 | $ | 275,008 | $– | $ | 375,633 | |||||||||
| Margarita Paláu-Hernández(3) | $ | 100,625 | $ | 200,018 | $– | $ | 300,643 | |||||||||
| Avedick B. Poladian | $ | 100,625 | $ | 225,024 | $– | $ | 325,649 | |||||||||
| Robert M. Shearer | $ | 100,625 | $ | 225,024 | $– | $ | 325,649 | |||||||||
| (1) | |
| (2) | Equity awards are granted to each non-employee director on the first business day following the |
| (3) | Mr. |
| 2022 PROXY STATEMENT | ||
| 71 |
Stock Ownership.Non-employee directors are required to own a number of shares of common stock of Occidental having a value of not less than six times the annual cash retainer for non-employee directors within five years of election to the Board. As of February 28, 2018, each of our non-employee directors is in compliance with these guidelines.
2018 Notice of Annual Meeting and Proxy Statement 50
Certain Beneficial Owners and Management
Based on a review of ownership reports filed with the SEC on or before March 11, 2022, the entities listed below wereare the only beneficial owners of greater than five percent5% of Occidental’s outstanding voting securities as of February 28, 2018.March 11, 2022, except as otherwise indicated in the notes to the table. This information may not be accurate or complete, and Occidental takes no responsibility for such information and makes no representation as to its accuracy or completeness as of the date hereof or any subsequent date. This information does not include changes in share ownership reported by the reporting person after the date of this table.
| Name and Address | Number of Shares Owned | Percent of Outstanding Common Stock | Sole Voting Shares | Shared Voting Shares | Sole Investment Shares | Shared Investment Shares | ||||||||||||||||||
| Vanguard Group Inc. 100 Vanguard Blvd. Malvern, PA 19355 | 57,965,837 | (1) | 7.57 | (1) | 1,067,252 | (1) | 180,730 | (1) | 56,761,170 | (1) | 1,204,667 | (1) | ||||||||||||
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 53,430,004 | (2) | 7.0 | (2) | 46,704,819 | (2) | 0 | (2) | 53,430,004 | (2) | 0 | (2) | ||||||||||||
| State Street Corporation One Lincoln Street Boston, MA 02111 | 38,802,190 | (3) | 5.07 | (3) | 0 | (3) | 38,802,190 | (3) | 0 | (3) | 38,802,190 | (3) | ||||||||||||
| BENEFICIAL OWNERSHIP OF 5% SHAREHOLDERS | |||||||||||||
| Name and Address | Total Number of Shares and Warrants Owned | Percent of Outstanding Common Stock(6) | Sole Voting Power | Shared Voting Power | Sole Investment Power | Shared Investment Power | |||||||
| Warren E. Buffett and affiliated entities(1) 3555 Farnam Street Omaha, NE 68131 | 202,129,232 | 19.80% | – | 202,129,232 | – | 202,129,232 | |||||||
| Dodge & Cox(2) 555 California Street, 40th Floor San Francisco, CA 94104 | 127,619,635 | 13.41% | 121,945,788 | – | 127,619,635 | – | |||||||
| The Vanguard Group(3) 100 Vanguard Blvd. Malvern, PA 19355 | 99,516,764 | 10.62% | – | 1,428,973 | 96,008,697 | 3,508,067 | |||||||
| BlackRock, Inc.(4) 55 East 52nd Street New York, NY 10055 | 59,581,305 | 6.36% | 54,211,755 | – | 59,581,305 | – | |||||||
| State Street Corporation(5) 1 Lincoln Street Boston, MA 02111 | 58,050,309 | 6.20% | – | 54,749,000 | – | 58,018,619 | |||||||
| (1) | |
| (2) | Pursuant to a Schedule 13G/A filed with the SEC on February 14, 2022, reporting beneficial ownership as of December 31, 2021. According to the filing, Dodge & Cox has sole voting power with regard to 121,945,788 securities (107,466,081 common shares and 14,479,707 warrants), sole investment power with regard to 127,619,635 securities (112,531,760 common shares and 15,087,875 warrants) and aggregate beneficial ownership of 127,619,635 securities (112,531,760 common shares and 15,087,875 warrants). |
| (3) | Pursuant to a Schedule 13G/A filed with the SEC on February 9, |
| (4) | |
| (5) | Pursuant to a Schedule 13G/A filed with the SEC on February |
| Pursuant to SEC rules, the percentage of common stock beneficially owned by a |
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Security Ownership
The following table includes certain information regarding the beneficial ownership of Occidental common stock as of February 28, 2018,March 11, 2022, by each of Occidental’s named executive officers, directors, and all executive officers and directors as a group. The address for each person is c/o Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046.
BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
| Name | Common Stock(1) | Restricted Stock(2) | Options Exercisable within 60 days | Total Shares Beneficially Owned | Percent of Outstanding Common Stock(3) |
| Spencer Abraham | 44,237 | 44,237 | |||
| Howard I. Atkins | 27,295 | 27,295 | |||
| Marcia E. Backus | 20,417 | 26,299 | 20,000 | 66,716 | |
| Eugene L. Batchelder | 30,628 | 30,628 | |||
| Cedric W. Burgher | 2,098 | 2,098 | |||
| John E. Feick | 43,268 | 43,268 | |||
| Margaret M. Foran | 38,918 | 38,918 | |||
| Carlos M. Gutierrez | 42,122 | 42,122 | |||
| Vicki Hollub | 76,697 | 18,425 | 85,000 | 180,122 | |
| William R. Klesse | 70,692 | 70,692 | |||
| Edward A. Lowe | 86,703 | 49,362 | 20,000 | 156,065 | |
| Jack B. Moore | 5,746 | 5,746 | |||
| Avedick B. Poladian | 47,468 | 47,468 | |||
| Glenn E. Vangolen | 22,775 | 4,963 | 35,000 | 62,738 | |
| Elisse B. Walter | 13,556 | 13,556 | |||
| All executive officers and directors as a group (17 persons) | 661,370 | 126,994 | 229,736 | 1,040,875 |
| BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS | |||||||||||
| Name | Common Stock(1) | Options Exercisable within 60 days | Warrants Exercisable within 60 Days | Total Shares Beneficially Owned | Percent of Outstanding Common Stock(2) | ||||||
| Marcia E. Backus | 109,313 | 182,732 | 13,342 | 305,387 | |||||||
| Vicky A. Bailey(3) | – | – | – | – | |||||||
| Stephen I. Chazen | 289,597 | – | 33,791 | 323,388 | |||||||
| Kenneth Dillon | 134,131 | 179,686 | 14,343 | 328,160 | |||||||
| Andrew Gould | 27,261 | – | 2,351 | 29,612 | |||||||
| Carlos M. Gutierrez | 43,578 | – | 7,832 | 51,410 | |||||||
| Vicki Hollub | 330,075 | 618,923 | 40,711 | 989,709 | |||||||
| Richard A. Jackson | 69,932 | 18,344 | 10,051 | 98,327 | |||||||
| William R. Klesse | 173,950 | – | 29,760 | 203,710 | |||||||
| Jack B. Moore | 46,521 | – | 4,799 | 51,320 | |||||||
| Margarita Paláu-Hernández | 21,455 | – | 1,737 | 23,192 | |||||||
| Robert L. Peterson | 102,069 | 18,344 | 15,176 | 135,589 | |||||||
| Avedick B. Poladian | 63,066 | – | 9,327 | 72,393 | |||||||
| Robert M. Shearer | 45,340 | – | 4,610 | 49,950 | |||||||
| All executive officers and directors as a group (16 persons) | 1,525,698 | 1,136,088 | 198,108 | 2,859,894 | |||||||
| (1) | For executive officers, includes shares held through the Occidental Petroleum Corporation Savings Plan as of |
| (2) |
| Less than | ||
| (3) | Ms. Bailey joined the Board on March 22, 2022. |
Occidental Petroleum Corporation 51
Section 16(a) Beneficial Ownership Reporting Compliance
DELINQUENT SECTION 16(A) REPORTS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 (the(as amended, the Exchange Act), Occidental’s executive officers, directors and any beneficial owner of more than 10 percent of any class of Occidental’s equity securities are required to file, with the SEC, and the NYSE, reports of ownership and changes in ownership of Occidental common stock. Copies of such reports are required to be furnished to Occidental. Based solely on its review of the copies of the reports furnished to Occidentalfiled with the SEC and written representations that no additional reports were required, Occidental believes that, during 2017,2021, all persons required to report complied with the Section 16(a) requirements,timely filed all required reports, with the exception of one Form 4 that, due to a technological error, was not filed on a timely basislate to report an open market purchasethe forfeiture of shares of Occidental’s commonrestricted stock by Eugene L. Batchelder.
2018 Notice of Annual Meeting and Proxy Statement 52
Mr. Peterson’s 2014 RSI-PB award.
Occidental is submitting this proposal to its stockholders for an advisory vote to approve the compensation of its named executive officers as disclosed in this proxy statement pursuant to Section 14A of the Exchange Act. At our 2017 Annual Meeting of Stockholders, the stockholders approved, on an advisory basis, a frequency of every year for casting advisory votes to approve named executive officer compensation.
The executive compensation program for the named executive officers includes many best-practice features that are intended to enhance the alignment of compensation with the interests of Occidental’s stockholders. The executive compensation program is described in the Compensation Discussion and Analysis (CD&A) section beginning on page 22 of this proxy statement.
The Compensation Committee strives to maintain a compensation program that will attract, retain and motivate outstanding executives by providing incentives to reward them for superior performance that supports Occidental’s long-term strategic objectives, whether in an up- or down-cycle commodity price environment, and is competitive with industry practices. The executive compensation program is intended to:
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The Board recommends that stockholders support the following resolution for the reasons described in the CD&A:
RESOLVED,that the stockholders approve, on an advisory basis, the compensation of Occidental’s named executive officers for 2017, as set forth in the CD&A section, Summary Compensation Table and all other table and narrative disclosures regarding named executive officer compensation set forth in this proxy statement.
A majority of the shares of common stock represented at the Annual Meeting and entitled to vote on this proposal must vote FOR the proposal to approve it. Your broker may not vote your shares on this proposal unless you give voting instructions. Abstentions have the same effect as votes cast AGAINST the proposal. Broker non-votes have no effect on the vote. As in past years, your vote will not directly affect or otherwise limit or enhance any existing compensation or award arrangement of any of our named executive officers, but the outcome of the say-on-pay vote will be taken into account by the Compensation Committee in making future compensation decisions.
| 2022 PROXY STATEMENT | |
Occidental Petroleum Corporation 53
At the Annual Meeting, stockholders will be asked to approve the Second Amendment (Second Amendment) to the Occidental Petroleum Corporation 2015 Long-Term Incentive Plan (2015 LTIP). The purpose of the Second Amendment is to increase the number of shares of Occidental’s common stock that may be issued under the 2015 LTIP by 45,000,000 additional shares. Occidental believes implementing the Second Amendment is advisable in order to ensure Occidental has an adequate number of shares available in connection with its compensation programs.
The following highlights of the material features of the 2015 LTIP, as amended to reflect the Second Amendment, are qualified by reference to the full text of (i) the 2015 LTIP, a copy of which is attached as Annex A, (ii) the First Amendment, a copy of which is attached as Annex B and (iii) the Second Amendment, which is attached as Annex C.
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The 2015 LTIP is intended to permit Occidental and its subsidiaries to attract and retain top quality employees and non-employee directors and consultants by providing these individuals with stock-based and other incentive award opportunities designed to enhance the profitable growth of Occidental. On February 11, 2015, the Board adopted the 2015 LTIP. The 2015 LTIP became effective on May 1, 2015 (the Original Effective Date) following receipt of stockholder approval at our 2015 Annual Meeting of Stockholders. In connection with Occidental’s adoption of Accounting Standards Update 2016-09, which is intended to simplify the accounting for share-based payment transactions, on July 14, 2016, the Board approved the First Amendment to the 2015 LTIP, which originally became effective on July 14, 2016 (First Amendment), which allows Occidental to withhold taxes due with respect to an award (including outstanding awards) from shares of Occidental’s common stock (including shares of common stock otherwise issuable under an award) at up to the maximum statutory withholding rate applicable to a participant without creating potential adverse accounting consequences.
2018 Notice of Annual Meeting and Proxy Statement 54
On February 8, 2018, the Board adopted the Second Amendment subject to stockholder approval. The purpose of the Second Amendment is to increase the number of shares of Occidental’s common stock that may be issued under the 2015 LTIP by 45,000,000 additional shares (Additional Shares).
Occidental believes approval of the Second Amendment will give it flexibility to make stock-based grants and other awards permitted under the 2015 LTIP over the next several years in amounts determined appropriate by the Compensation Committee, which administers the 2015 LTIP (as discussed more fully below). This timeline, however, is simply an estimate used to determine the number of new shares to ask the stockholders to approve under the Second Amendment and future circumstances may require a change to expected equity grant practices. These circumstances include, but are not limited to, the future price of Occidental’s common stock, award levels and amounts provided by Occidental’s competitors and hiring activity over the next few years. On December 29, 2017, the closing market price of Occidental’s common stock was $73.66 per share, as reported on the NYSE, and Occidental had 18,836,578 shares of common stock that remained available for awards under the 2015 LTIP.
The Second Amendment will allow Occidental to continue to grant, if desired, a variety of equity-based compensation alternatives in structuring compensation arrangements for its personnel. While Occidental is aware of the potential dilutive effect of compensatory equity awards, Occidental also recognizes the significant motivational and performance benefits that may be achieved from making such awards. As of December 31, 2017, the total number of shares of Occidental’s outstanding common stock was 765,104,512. If the Second Amendment is approved, the potential dilution from outstanding awards and shares available for future awards under the 2015 LTIP would be approximately 8.4%. This percentage is calculated on a fully-diluted basis by dividing the total shares underlying outstanding equity awards as of December 31, 2017 plus the shares available for future awards under the 2015 LTIP (together, the numerator) by the total shares of Occidental common stock outstanding as of December 31, 2017 plus the number of shares in the numerator. Please see“Description of the 2015 LTIP–Shares Subject to the 2015 LTIP”for additional information regarding the number of additional shares being requested under the Second Amendment. Occidental’s three-year average annual burn rate as of December 31, 2017 was 0.3%. This percentage is calculated by dividing the total shares underlying equity awards granted in a year by the weighted average shares outstanding during the year.
The 2015 LTIP was originally designed to allow Occidental to provide “performance-based compensation” that was tax deductible by Occidental without regard to the limits of Section 162(m) of the Internal Revenue Code and the regulations thereunder (Section 162(m)). However, the performance-based compensation exception under Section 162(m) was eliminated by the Tax Cuts and Jobs Act of 2017.
The Second Amendment will not be implemented unless approved by stockholders. If the Second Amendment is not approved by stockholders, the 2015 LTIP will remain in effect in its present form (which, for the avoidance of doubt, is as amended by the First Amendment) and Occidental will continue to grant awards thereunder until the share reserve under the 2015 LTIP is exhausted.
The following is a summary of the material terms of the 2015 LTIP, as amended to reflect the Second Amendment, and is qualified in its entirety by the text of the Second Amendment, which is attached as Annex C to this Proxy Statement and is incorporated by reference in this proposal.
Purpose of the 2015 LTIP.The purpose of the 2015 LTIP is to provide a means whereby eligible employees, directors and consultants may acquire and maintain stock ownership or awards, the value of which is tied to Occidental’s performance. In furtherance of this purpose, the 2015 LTIP permits the grant of nonstatutory options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards and cash awards, any of which may be further designated as performance awards (collectively referred to as Awards).
Administration.The 2015 LTIP is administered by the Compensation Committee of the Board, except with respect to grants to non-employee directors that are under the purview of the Board, with respect to both the amount and terms of any grant, and to the extent the Board elects to administer the 2015 LTIP. Subject to the terms of the 2015 LTIP and applicable law, the Compensation Committee has the authority to interpret and construe all provisions of the 2015 LTIP and Awards issued thereunder and to make all decisions and determinations relating to the operation of the 2015 LTIP, including the authority and discretion to:
Occidental Petroleum Corporation 55
The Compensation Committee may also delegate authority to a company officer who is also a member of the Board to make grants of Awards to employees who are not executive officers under Section 16 of the Securities Exchange Act of 1934, and may delegate ministerial functions to other officers or employees.
Duration.If approved by stockholders, the Second Amendment will be effective as of February 8, 2018 (Amendment Effective Date). The 2015 LTIP will terminate on May 1, 2025, the tenth anniversary of the Original Effective Date, unless earlier terminated by our Board. Although no further Awards may be granted under the 2015 LTIP after May 1, 2025, the 2015 LTIP will remain in effect until all Awards granted under the 2015 LTIP have been satisfied or have expired.
Eligible Individuals.All officers and employees of Occidental and its subsidiaries and other persons who provide services to Occidental and its subsidiaries, including members of the Board, are eligible to receive Awards under the 2015 LTIP. Eligible employees, directors and consultants who are designated by the Compensation Committee to receive an Award under the 2015 LTIP are referred to as “Participants.” As of February 28, 2018, there were 10 non-employee directors, 30 officers (including 7 executive officers) and approximately 3,300 other employees who would be eligible to participate in the 2015 LTIP.
Shares Subject to 2015 LTIP.The Second Amendment would increase the number of shares of common stock available for Awards under the 2015 LTIP by 45,000,000 shares. Accordingly, the total number of shares of common stock available for issuance in connection with Awards under the 2015 LTIP will not exceed 80,000,000 shares (the Amended Reserved Shares). In addition to the Amended Reserved Shares, any shares subject to outstanding awards under the Occidental Petroleum Corporation 2005 Long-Term Incentive Plan (2005 LTIP) that, following the Original Effective Date, are forfeited, cancelled or terminated will also be available for the grant of Awards under the 2015 LTIP (referred to herein as the 2005 LTIP Forfeitable Shares). Together the Amended Reserved Shares and the 2005 LTIP Forfeitable Shares represent the maximum number of shares that may be issued under the 2015 LTIP.
As of February 28, 2018, 813,477 shares of common stock were subject to outstanding awards under the 2005 LTIP and could be considered 2005 LTIP Forfeitable Shares, although this number is subject to change prior to the Amendment Effective Date. There is no way to predict how many, if any, of the 2005 LTIP Forfeitable Shares may be forfeited or terminated and, thus, may become available for future grants under the 2015 LTIP. All of the Amended Reserved Shares are available for issuance as incentive stock options. The foregoing limitations will be subject to the adjustment provisions contained in the 2015 LTIP.
Any shares of common stock issued in connection with Awards other than options and stock appreciation rights shall be counted against the limits described in the preceding paragraph pursuant to a fungible share counting mechanism as three shares for every one share issued in connection with such Award. If an Award expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated, the shares of common stock subject to such Award will again be available for grant under the 2015 LTIP. However, (i) shares withheld or otherwise tendered in payment of any exercise price or taxes related to an Award, (ii) shares subject to an option or stock appreciation right that was exercised, or (iii) shares repurchased on the open market with the proceeds of an option’s exercise price will not be available for future Awards under the 2015 LTIP.
Common stock issued under the 2015 LTIP may come from authorized but unissued shares of common stock, from treasury stock held by Occidental or from previously issued shares of common stock reacquired by Occidental, including shares purchased on the open market. If stockholders approve this proposal, Occidental intends to file, pursuant to the Securities Act of 1933, a registration statement on Form S-8 to register the Additional Shares.
Award Limitations.As noted above, the 2015 LTIP was originally designed to allow Occidental to provide “performance-based compensation” that was tax deductible by Occidental without regard to the limits of Section 162(m). However, the performance-based compensation exception under Section 162(m) was eliminated by the Tax Cuts and Jobs Act of 2017. Nevertheless, the 2015 LTIP still includes restrictions on the maximum number of common shares that may be granted and the maximum amount of cash compensation payable to certain individuals in a specified period. Accordingly, no covered employee may receive share-denominated Awards during a calendar year with respect to more than 1,000,000 shares of common stock. For cash-based Awards, the maximum aggregate dollar amount that may be granted to any covered employee in any calendar year is limited to $15,000,000. In addition, in any calendar year, a nonemployee director may not be granted Awards relating to more than 50,000 common shares and no participant may be granted options (whether nonstatutory stock options or incentive stock options) or stock appreciation rights relating to more than 2,000,000 common shares. The foregoing share limitations will be subject to the adjustment provisions contained in the 2015 LTIP but will not be subject to the fungible share counting rules that apply to the overall share pool.
2018 Notice of Annual Meeting and Proxy Statement 56
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The following types of Awards may be granted on the terms and conditions set forth in the 2015 LTIP.
Stock Options.The Compensation Committee may grant stock options to purchase one or more shares of Occidental common stock. Stock options granted under the 2015 LTIP may be either incentive stock options governed by Section 422 of the Internal Revenue Code or stock options that are not intended to meet these requirements (called nonstatutory options). The Compensation Committee will determine the specific terms and conditions of any stock option at the time of grant. The exercise price of any stock option will not be less than 100% of the fair market value of Occidental’s common stock on the date of the grant (except with respect to conversion awards granted as result of a merger, consolidation or acquisition as necessary to preserve the value of the award), and in the case of an incentive stock option granted to an eligible employee that owns more than 10% of Occidental’s common stock, the exercise price will not be less than 110% percent of the fair market value of the common stock on the date of grant. The term for a stock option may not exceed 10 years. The Compensation Committee will determine the methods and form of payment for the exercise price of a stock option (including, in the discretion of the Compensation Committee, payment in common stock, other Awards, or other property) and the methods and forms in which common stock will be delivered to a Participant.
Stock Appreciation Rights.The Compensation Committee may grant stock appreciation rights (SARs) independent of or in connection with a stock option. The exercise price per share of a SAR will be an amount determined by the Compensation Committee. However, SARs must generally have an exercise price not less than 100% of the fair market value of Occidental’s common stock on the date the SAR is granted. Generally, each SAR will entitle a Participant upon exercise to an amount equal to (i) the excess of (a) the fair market value of one share of common stock on the exercise date over (b) the exercise price, times (ii) the number of shares of common stock covered by the SAR. The Compensation Committee will determine the specific terms and conditions of any SAR at the time of grant. Payment shall be made in common stock or in cash, or partly in common stock and partly in cash, as determined by the Compensation Committee. The term of a SAR may not exceed 10 years.
Restricted Stock.The Compensation Committee may grant restricted stock, which are shares of Occidental common stock that are subject to transfer limitations, a risk of forfeiture and other restrictions imposed by the Compensation Committee in its discretion. Restrictions may lapse at such times and under such circumstances as determined by the Compensation Committee. During the restricted period, the holder will have rights as a stockholder, including the right to vote the common stock subject to the Award and to receive cash dividends thereon (which may, if required by the Compensation Committee, be held by Occidental during the restricted period subject to the same vesting terms that apply to the underlying restricted stock award). Unless otherwise determined by the Compensation Committee, common stock distributed to a holder of restricted stock in connection with a stock split or stock dividend, and other property (other than cash) distributed as a dividend, will be subject to restrictions and a risk of forfeiture to the same extent as the underlying restricted stock award with respect to which such common stock or other property has been distributed.
Restricted Stock Units.The Compensation Committee may grant restricted stock units (RSUs), which are rights to receive shares of Occidental common stock, cash or a combination thereof at the end of a specified period. The Compensation Committee may subject RSUs to restrictions (which may include a risk of forfeiture) and such restrictions may lapse at such times determined by the Compensation Committee. RSUs may be satisfied by delivery of shares of common stock, cash equal to the fair market value of the specified number of shares of common stock covered by the RSUs, or any combination thereof determined by the Compensation Committee at the date of grant or thereafter.
Bonus Stock.The Compensation Committee may grant bonus stock awards to eligible individuals. Each bonus stock award will constitute a transfer of unrestricted shares of Occidental common stock on terms and conditions determined by the Compensation Committee.
Dividend Equivalents.The Compensation Committee may grant dividend equivalents to eligible individuals, entitling the Participant to receive cash, common stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of common stock, or other periodic payments at the discretion of the Compensation Committee. Dividend equivalents may be awarded on a freestanding basis or in connection with another Award (other than restricted stock or bonus stock). The Compensation Committee may provide that dividend equivalents will be payable or distributed when accrued, deferred until a later payment date or deemed reinvested in additional common stock, Awards or other investment vehicles. The Compensation Committee will specify any restrictions on transferability and risks of forfeiture imposed upon dividend equivalents. See“Features of Awards—Dividend Equivalent Payments on Performance Awards”below for additional information.
Other Stock-Based Awards.The Compensation Committee may grant other stock-based awards denominated in or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of Occidental common stock, subject to applicable legal limitations and the terms of the 2015 LTIP. In the discretion of the Compensation Committee, other stock-based awards may be subject to such vesting and other terms as the Compensation Committee may establish, including performance goals.
Occidental Petroleum Corporation 57
Cash Awards.The Compensation Committee may grant cash awards on a free-standing basis or as an element of or a supplement to any other Award permitted under the 2015 LTIP. The Compensation Committee will determine the amount of and any other terms and conditions of such cash awards.
Performance Awards.The Compensation Committee may designate that an Award granted under the 2015 LTIP will constitute a “Performance Award.” A Performance Award is any Award the grant, vesting, exercise and/or settlement of which (and/or the timing or amount thereof) is subject to the achievement of one or more performance goals specified by the Compensation Committee. The Compensation Committee may exercise its discretion to reduce or increase the amount payable under a Performance Award. The performance period for a Performance Award may range from one to seven years.
Section 162(m) Awards.As noted above, the 2015 LTIP contains provisions that originally allowed for the grant of Performance Awards intended to satisfy the requirements associated with the performance-based compensation exception available under Section 162(m) (referred to as Section 162(m) Awards). The Tax Cuts and Jobs Act of 2017 eliminated the performance-based compensation exception. In accordance with such legislation, these provisions continue to apply to outstanding Section 162(m) Awards granted prior to November 2, 2017. However, due to such legislation, Occidental does not anticipate granting any Section 162(m) Awards in the future and such provisions are not discussed in this proposal.
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Dividend Equivalent Payments on Performance Awards.Except with respect to certain Performance Awards that are designated by the Compensation Committee as retention awards, dividend equivalent rights with respect to any Performance Award will be subject to the same performance goals as the underlying Performance Award and will not be paid until the Performance Award has vested and been earned.
Transferability of Awards.Awards generally may not be assigned, pledged, hedged, sold or otherwise transferred other than by will or the laws of descent and distribution or pursuant to a Participant’s written beneficiary form or a qualified domestic relations order issued by a court of competent jurisdiction and approved by the Compensation Committee. An incentive stock option will not be transferable other than by will or the laws of descent and distribution. In accordance with rules and procedures established by the Compensation Committee from time to time, a Participant may transfer, without consideration, all or part of an Award to one or more immediate family members or related family trusts or partnerships or similar entities, as determined by the Compensation Committee. Any attempt to transfer an Award in violation of the terms of the 2015 LTIP or without proper notification to the Compensation Committee shall be deemed null and void.
Minimum Vesting Requirements and Termination of Service.Awards granted under the 2015 LTIP (other than Performance Awards and cash awards) generally will be subject to a minimum vesting or forfeiture restriction period of three years, which may be pro-rata or all at the end of such period, with any pro rata formula determined in the good faith discretion of the Compensation Committee (provided no tranche of any Award shall vest prior to one year from the date of grant of such Award, except with respect to the 10% carve-out described below). However, a vesting or forfeiture restriction period of less than three years may be approved for Awards (other than Performance Awards and cash awards) with respect to up to 10% of the shares of common stock authorized for issuance under the 2015 LTIP. The treatment of an Award upon the occurrence of certain specified events, including the termination of a Participant’s service with Occidental and its subsidiaries, will be subject to the provisions of the 2015 LTIP and the applicable Award agreement.
No Repricing; No Reload Options.Other than in connection with a corporate transaction involving Occidental, without the approval of stockholders, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding stock options or SARs or to cancel outstanding stock options or SARs in exchange for cash, other Awards or stock options or SARs with an exercise price less than the exercise price of the original stock options or SARs. Reload options may not be granted under the 2015 LTIP.
Reorganizations.In the event of certain changes to Occidental’s capitalization, such as a stock split, stock combination, stock dividend, extraordinary cash dividend, exchange of shares, or other recapitalization, merger or otherwise, that result in an increase or decrease in the number of outstanding shares of common stock, appropriate adjustments will be made by the Compensation Committee as to the number and price of shares subject to an Award, the number of shares available for issuance under the 2015 LTIP and the maximum individual limitations applicable to share-based Awards.
Change in Control.In the event of a “change in control” (as defined in the 2015 LTIP), the vesting and forfeiture restrictions applicable to an Award will not lapse, and the time of exercisability of an Award will not be accelerated to a date, in either case, earlier than (i) the original date specified for the lapse of such restrictions or the time of exercise in the applicable Award agreement, or (ii) the date the Participant’s employment or other service relationship is terminated by Occidental or its subsidiaries without “cause” or by the Participant for “good reason” (in each case, as defined in the 2015 LTIP); provided such termination date occurs within 12 months following the date of such change in control. In addition, upon a change in control, the Compensation Committee shall have the discretion without the consent or approval of any holder to take any of the following
2018 Notice of Annual Meeting and Proxy Statement 58
actions: (i) require the surrender of Awards with or without a cash payment; (ii) provide for the assumption, substitution or continuation of Awards by the successor company or a parent or subsidiary thereof; or (iii) make any such other adjustments as the Compensation Committee determines appropriate.
Tax Withholding.Occidental and its subsidiaries are authorized to withhold from any Award granted, or any payment relating to an Award under the 2015 LTIP, including from a distribution of common stock, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take any other action the Compensation Committee may deem advisable to satisfy obligations for the payment of withholding taxes and other tax obligations related to an Award. The Compensation Committee will determine the form of payment of such tax withholding obligations, which may include, without limitation, cash, common stock or other property. By way of example, following the adoption of the First Amendment, the 2015 LTIP provides that Occidental may withhold from a Participant’s Award a number of shares of Common Stock with an aggregate fair market value that does not exceed the aggregate amount of such tax obligations determined based on the Participant’s applicable maximum statutory withholding rate that may be utilized without creating adverse accounting treatment with respect to the Award. However, unless (i) specifically provided otherwise in the future by an action of the Compensation Committee or (ii) a Participant provides written notification to Occidental to apply a different withholding rate, Occidental will withhold all applicable tax-related items legally payable by a Participant with respect to an Award that was granted on or before July 14, 2016, the effective date of the First Amendment, from the cash and shares of common stock subject thereto based on the Participant’s applicable minimum statutory withholding rate at the time such tax obligations are due.
Amendment.The Board may amend, alter, suspend, discontinue or terminate the 2015 LTIP at any time, subject to the approval of Occidental’s stockholders if required by any state or federal law or regulation or the rules of any stock exchange; provided that, without the consent of an affected Participant, no such action by the Board may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Compensation Committee may waive any conditions or rights under the 2015 LTIP, or amend, alter, suspend, discontinue or terminate any Award previously granted, except as otherwise provided in the 2015 LTIP; provided that, without the consent of an affected Participant, no such Compensation Committee action may materially and adversely affect the rights of a Participant under such Award.
Clawback Policy.Awards under the 2015 LTIP are subject to compliance with Occidental’s Code of Business Conduct and related policies. Violation of the Code of Business Conduct may result in reduction, cancelation, forfeiture or recoupment of Awards as determined by the Compensation Committee. In addition, Awards granted under the 2015 LTIP will be subject to any written clawback policy adopted by Occidental to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Certain Federal Income Tax Consequences
The following discussion is for general information only and is intended to summarize briefly the U.S. federal income tax consequences of certain transactions contemplated under the 2015 LTIP. This description is based on current laws in effect on February 28, 2018, which are subject to change (possibly retroactively). The tax treatment of Participants in the 2015 LTIP may vary depending on each Participant’s particular situation and may, therefore, be subject to special rules not discussed below. No attempt has been made to discuss any potential foreign, state or local tax consequences or any tax consequences related to the transfer of Awards, which is generally prohibited by the 2015 LTIP except in limited circumstances. Participants are advised to consult with a tax advisor concerning the specific tax consequences of participating in the 2015 LTIP.
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Stock Options and Stock Appreciation Rights.Participants will not recognize taxable income upon the grant of a stock option or a SAR. Upon the exercise of a nonstatutory option or a SAR, a Participant will recognize ordinary compensation income (subject to withholding if an employee) in an amount equal to the excess of (i) the amount of cash and the fair market value of the common stock received, over (ii) the exercise price of the Award. A Participant will generally have a tax basis in any shares of common stock received pursuant to the exercise of a nonstatutory option or SAR that equals the fair market value of such shares on the date of exercise. Subject to the discussion under “Tax Consequences to Occidental” below, Occidental will be entitled to a deduction for federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by a Participant under the foregoing rules.
Participants eligible to receive a stock option intended to qualify as an incentive stock option under Section 422 of the Internal Revenue Code will not recognize taxable income on the grant of an incentive stock option. Upon the exercise of an incentive stock option, a Participant will not recognize taxable income, although the excess of the fair market value of the shares of common stock received upon exercise of the incentive stock option (ISO Stock) over the exercise price will increase the alternative minimum taxable income of the Participant, which may cause such Participant to incur alternative minimum tax. The payment of any alternative minimum tax attributable to the exercise of an incentive stock option would be allowed as a credit against the Participant’s regular tax liability in a later year to the extent the Participant’s regular tax liability is in excess of the alternative minimum tax for that year.
Occidental Petroleum Corporation 59
Upon the disposition of ISO Stock that has been held for the required holding period (generally, at least two years from the date of grant and one year from the date of exercise of the incentive stock option), a Participant will generally recognize capital gain (or loss) equal to the excess (or shortfall) of the amount received in the disposition over the exercise price paid by the Participant for the ISO Stock. However, if a Participant disposes of ISO Stock that has not been held for the requisite holding period (a Disqualifying Disposition), the Participant will recognize ordinary compensation income in the year of the Disqualifying Disposition in an amount equal to the amount by which the fair market value of the ISO Stock at the time of exercise of the incentive stock option (or, if less, the amount realized in the case of an arm’s length disposition to an unrelated party) exceeds the exercise price paid by the Participant for such ISO Stock. A Participant would also recognize capital gain to the extent the amount realized in the Disqualifying Disposition exceeds the fair market value of the ISO Stock on the exercise date. If the exercise price paid for the ISO Stock exceeds the amount realized (in the case of an arm’s-length disposition to an unrelated party), such excess would ordinarily constitute a capital loss.
Occidental will generally not be entitled to any federal income tax deduction upon the grant or exercise of an incentive stock option, unless a Participant makes a Disqualifying Disposition of the ISO Stock. If a Participant makes a Disqualifying Disposition, Occidental will then, subject to the discussion below under “Tax Consequences to Occidental,” be entitled to a tax deduction that corresponds as to timing and amount with the compensation income recognized by a Participant under the rules described in the preceding paragraph.
Under current rulings, if a Participant transfers previously held shares of common stock (other than ISO Stock that has not been held for the requisite holding period) in satisfaction of part or all of the exercise price of a stock option, whether a nonstatutory option or an incentive stock option, no additional gain will be recognized on the transfer of such previously held shares in satisfaction of the nonstatutory option or incentive stock option exercise price (although a Participant would still recognize ordinary compensation income upon exercise of an nonstatutory option in the manner described above). Moreover, that number of shares of common stock received upon exercise which equals the number of shares of previously held common stock surrendered in satisfaction of the nonstatutory option or incentive stock option exercise price will have a tax basis that equals the tax basis of the previously held shares of common stock surrendered in satisfaction of the nonstatutory option or incentive stock option exercise price. Any additional shares of common stock received upon exercise will have a tax basis that equals the amount of cash (if any) paid by the Participant, plus the amount of compensation income recognized by the Participant under the rules described above.
Other Awards: Cash Awards, Restricted Stock Units, Dividend Equivalents, Restricted Stock and Bonus Stock.A Participant will recognize ordinary compensation income upon receipt of cash pursuant to a cash award or, if earlier, at the time the cash is otherwise made available for the Participant to draw upon. Individuals will not have taxable income at the time of grant of a restricted stock unit, but rather, will generally recognize ordinary compensation income at the time he or she receives cash or shares of common stock in settlement of the restricted stock unit award, as applicable, in an amount equal to the cash or the fair market value of the common stock received. The dividend equivalents, if any, received with respect to a restricted stock unit or other Award will be taxable as ordinary compensation income, not dividend income, when paid.
A recipient of restricted stock or bonus stock generally will be subject to tax at ordinary income tax rates on the fair market value of the common stock when it is received, reduced by any amount paid by the recipient; however, if the common stock is not transferable and is subject to a substantial risk of forfeiture when received, a Participant will recognize ordinary compensation income in an amount equal to the fair market value of the common stock (i) when the common stock first becomes transferable and is no longer subject to a substantial risk of forfeiture, in cases where a Participant does not make a valid election under Section 83(b) of the Internal Revenue Code, or (ii) when the Award is received, in cases where a Participant makes a valid election under Section 83(b) of the Internal Revenue Code. If a Section 83(b) election is made and the shares are subsequently forfeited, the recipient will not be allowed to take a deduction for the value of the forfeited shares. If a Section 83(b) election has not been made, any dividends received with respect to restricted stock that is subject at that time to a risk of forfeiture or restrictions on transfer generally will be treated as compensation that is taxable as ordinary income to the recipient; otherwise the dividends will be treated as dividends.
Code Section 409A.Awards under the 2015 LTIP are intended to be designed, granted and administered in a manner that is either exempt from the application of or complies with the requirements of Section 409A of the Internal Revenue Code in an effort to avoid the imposition of taxes and/or penalties. To the extent that an Award under the 2015 LTIP fails to comply with Section 409A, such Award may to the extent possible be modified to comply with such requirements.
2018 Notice of Annual Meeting and Proxy Statement 60
OF SELECTION OF KPMG AS OCCIDENTAL’S INDEPENDENT AUDITOR | OF DIRECTORS RECOMMENDS THAT YOU VOTE |
Reasonable Compensation.In order for the amounts described above to be deductible by Occidental (or a subsidiary), such amounts must constitute reasonable compensation for services rendered or to be rendered and must be ordinary and necessary business expenses.
Golden Parachute Payments.The ability of Occidental (or the ability of one of its subsidiaries) to obtain a deduction for future payments under the 2015 LTIP could also be limited by the golden parachute rules of Section 280G of the Internal Revenue Code, which prevent the deductibility of certain excess parachute payments made in connection with a change in control of an employer-corporation.
The above summary relates to U.S. federal income tax consequences only and applies to U.S. citizens and foreign persons who are U.S. residents for U.S. federal income tax purposes.
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The future Awards, if any, that will be made to eligible individuals under the 2015 LTIP are subject to the discretion of the Compensation Committee, and thus we cannot currently determine the benefits or number of shares subject to Awards that may be granted to Participants in the future under the 2015 LTIP. Therefore, the New Plan Benefits Table is not provided.
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All of Occidental’s stock-based compensation plans for its employees and non-employee directors have been approved by its stockholders. The following is a summary of the securities available for issuance under such plans as of December 31, 2017:
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
| a) Number of securities to be | c) Number of securities remaining | ||||||
| issued upon exercise of | b) Weighted-average exercise | available for future issuance | |||||
| outstanding options, | price of outstanding options, | under equity compensation plans | |||||
| warrants and rights | warrants and rights | (excluding securities in column (a)) | |||||
| 7,339,506 | (1) | $ 79.98 | (2) | 18,836,578 | (3)(4) |
A majority of the shares of common stock represented at the Annual Meeting and entitled to vote at the Annual Meeting must vote FOR this proposal to approve the Second Amendment to the 2015 LTIP. Your broker may not vote your shares on this proposal unless you give voting instructions.
Abstentions have the same effect as votes AGAINST the proposal. Broker non-votes have no effect on the vote.
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Occidental Petroleum Corporation 61
| THE RATIFICATION OF THE SELECTION OF KPMG AS OCCIDENTAL’S INDEPENDENT |
| Audit and Non-Audit Services Pre-Approval Policy and Procedures |
The Audit Committee must give prior approval to any management request for any amount or type of service (audit, audit-related and tax services or, to the extent permitted by law, non-audit services) Occidental’s independent auditor provides to Occidental. Additionally, the Audit Committee has delegated to the Audit Committee Chair full authority to approve any such request provided the Audit Committee Chair presents any approval so given to the Audit Committee at its next scheduled meeting. All audit and audit-related services rendered by KPMG LLP in 20172021 were approvedpre-approved by the Audit Committee or the Audit Committee Chair before KPMG LLP was engaged for such services. No services of any kind were approved pursuant to the de minimis exception for non-audit services set forth in Rule 2-01 of Regulation S-X.
| Audit and Other Fees |
KPMG LLP was our independent auditor for the years ended December 31, 20172021 and 2016.2020. The aggregateaudit fees billed for professional services renderedand expected to Occidentalbe billed by KPMG LLP for, and the fees billed by KPMG LLP for all other services rendered during, the years ended December 31, 20172021 and 2016,2020, were as follows (in millions):
| Services Provided | 2017 | 2016 | |||||
| Audit Fees(1) | $ | 8.8 | $ | 8.9 | |||
| Audit-Related Fees(2) | $ | — | $ | — | |||
| Total(3) | $ | 8.8 | $ | 8.9 | |||
| Services Provided | 2021 | 2020 | ||||||
| Audit fees(1) | $ | 13.1 | $ | 13.7 | ||||
| Audit-related fees(2) | $ | 0.4 | $ | 0.1 | ||||
| Tax fees(3) | $ | 0.5 | $ | 1.4 | ||||
| All other fees(4) | $ | 0.4 | $ | 0.3 | ||||
| Total | $ | 14.4 | $ | 15.5 | ||||
| (1) | Audit fees include fees necessary to perform the annual audit and quarterly reviews in accordance with |
| (2) | |
| (3) |
| (4) | All other fees |
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Proposal 3: Ratification of Selection of Kpmg as Occidental’s Independent Auditor
Ratification of Selection of Independent Auditor
The Audit Committee of the Board of Directors of Occidental has selected KPMG LLP as independent auditor to audit the consolidated financial statements of Occidental and its subsidiaries for the year ending December 31, 2018.2022. KPMG LLP has audited Occidental’s financial statements since 2002. A member of that firm willis expected to be present at the 2022 Annual Meeting, will have an opportunity to make a statement, if so desired, and willis expected to be available to respond to appropriate questions.
As a matter of good corporate governance, the Board of Directors of Occidental submits the selection of the independent auditor to our stockholdersshareholders for ratification. A majority of the shares of common stock representedpresent or by proxy at the 2022 Annual Meeting and entitled to vote on this proposal must vote FOR“FOR” the proposal to ratify the selection of auditor.auditor selection. Abstentions have the same effect as votes AGAINST“AGAINST” the proposal. Your broker may vote your shares on the proposal if you do not give your broker voting instructions.instructions, although we are aware that some brokers are choosing not to exercise this discretionary voting authority. As a result, we recommend you submit your vote as soon as possible. If the stockholdersshareholders do not ratify the selection of KPMG LLP, the Audit Committee will appointconsider whether it is appropriate to select another independent auditor. Even if the shareholders ratify the selection of KPMG LLP, the Audit Committee may select a different independent auditor for 2018, which mayat any time during the year if it determines that this would be KPMG LLP.in the best interests of Occidental and our shareholders. If KPMG LLP should decline to act or otherwise become incapable of acting or if its employment is discontinued, the Audit Committee will appoint theselect another independent auditor for 2018.
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2018 Notice of Annual Meeting and Proxy Statement 62
The Audit Committee has reviewed and discussed Occidental’s audited financial statements for the fiscal year ended December 31, 2017,2021, including management’s annual assessment of and report on Occidental’s internal control over financial reporting, with management and KPMG LLP, Occidental’s independent auditor. In addition, the Audit Committee has discussed with KPMG LLP the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees.the applicable standards of the PCAOB and the SEC. The Audit Committee received from KPMG LLP written disclosures and the letter regarding its independence as required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees.the applicable requirements of the PCAOB. The Audit Committee has also considered whether the provision of non-audit services provided by KPMG LLP to Occidental is compatible with maintaining their independence and has discussed with KPMG LLP the firm’s independence. Based upon the reports and discussions described in this report, the Audit Committee recommended to the Board that the audited financial statements be included in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2017,2021, to be filed with the SEC.
Respectfully submitted,
THE AUDIT COMMITTEE
Avedick B. Poladian (Chair)
Howard I. Atkins
Andrew Gould
Carlos M. Gutierrez
Robert M. Shearer
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Elisse B. Walter
| Proposal | SHAREHOLDER PROPOSAL REQUESTING OCCIDENTAL SET AND DISCLOSE QUANTITATIVE SHORT-, MEDIUM-AND LONG-TERM GHG EMISSIONS REDUCTION TARGETS CONSISTENT WITH THE PARIS AGREEMENT | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THE SHAREHOLDER PROPOSAL, IF PROPERLY PRESENTED, FOR THE REASONS STATED ON PAGE 78. |
Occidental has been advised that the following shareholder proposal may be introduced at the 2022 Annual Meeting. The Board of Directors disclaims any responsibility for the content of the proposal and for the statements made in support thereof, which, except for minor formatting changes, are presented in the form received from the shareholder proponent. The shareholder proposal is required to be voted on at the 2022 Annual Meeting only if it is properly presented.
Follow This submitted this proposal on behalf of Benta B.V. (the proponent), Sneekerpad 4, 8651 NE, IJlst, Friesland, The Netherlands, beneficial owner of 1,100 shares of Occidental’s common stock.
Proposal 4
WHEREAS: We, the shareholders, must protect our assets against devastating climate change, and we therefore support companies to substantially reduce greenhouse gas (GHG) emissions.
RESOLVED: Shareholders support the company to set and publish targets that are consistent with the goal of the Paris Climate Agreement: to limit global warming to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C.
These quantitative targets should cover the short-, medium-, and long-term greenhouse gas (GHG) emissions of the company’s operations and the use of its energy products (Scope 1, 2, and 3).
Shareholders request that the company report on the strategy and underlying policies for reaching these targets and on the progress made, at least on an annual basis, at reasonable cost and omitting proprietary information.
You have our support.
SUPPORTING STATEMENT:
The policies of energy companies - the largest greenhouse gas (GHG) emitters - are crucial to confronting the climate crisis. Therefore shareholders support oil and gas companies to substantially reduce their emissions.
We, the shareholders, understand this support to be essential in protecting all our assets in the global economy from devastating climate change.
We therefore support the Company to set emission reduction targets for all emissions: the emissions of the company’s operations and the emissions of its energy products (Scope 1, 2, and 3). Reducing Scope 3 emissions, the vast majority, is essential to limiting global heating.
Scientific Consensus
The world’s leading international scientific bodies recently released reports which clearly state the need for deep cuts in emissions in order to limit global warming to safe levels.
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Proposal 4: Shareholder Proposal
Financial momentum
A growing international consensus has emerged among financial institutions that climate-related risks are a source of financial risk, and therefore limiting global warming is essential to risk management and responsible stewardship of the economy.
Backing from investors that insist on targets for all emissions continues to gain momentum: 2021 saw unprecedented investor support for climate resolutions. In the US, three of these climate resolutions passed with a historic majority. In Europe, support for these climate resolutions continued to build.
Legal risk
In 2021, a Dutch court ordered Shell to severely reduce their worldwide emissions (Scope 1, 2, and 3) by 2030. This indicates that oil majors and large investors have an individual legal responsibility to combat dangerous climate change by reducing emissions and confirms the risk of liability.
We believe that the Company could lead and thrive in the energy transition. We therefore encourage you to set targets that are inspirational for society, employees, shareholders, and the energy sector, allowing the company to meet an increasing demand for energy while reducing GHG emissions to levels consistent with curbing climate change.
You have our support.
| 2022 PROXY STATEMENT | ||
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Proposal 4: Shareholder Proposal
THE BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION
The Board of Directors recommends that shareholders vote AGAINST this proposal.
Summary
While the Board of Directors recommends that shareholders vote AGAINST this proposal, it agrees with Follow This that the policies of energy companies are crucial to confronting climate change and shares Follow This’ view that Occidental can lead and thrive in the energy transition. As the first major U.S. oil producer to establish goals for net-zero greenhouse gas (GHG) emissions for Scope 1, 2 and 3 that align with the Paris Agreement, Occidental is committed to advancing a vision for a lower-carbon world.
As described in our 2021 Climate Report, Occidental’s net-zero strategy employs four key elements:
| (1) | revolutionizing carbon management by applying its 50 years of leadership in carbon dioxide (CO2) separation, transportation, use, recycling and storage to invest in, develop, commercialize and deploy leading-edge, net-zero carbon removal, carbon capture, utilization and storage (CCUS) and zero-emissions power technologies and associated products; |
| (2) | reducing emissions across its operations and energy use through employee-driven innovation and excellence, such as its Find It/Fix It program and state-of-the-art, cost-effective technologies being piloted by its Emissions Technology Team; |
| (3) | reusing and recycling CO2 with technologies and partnerships that use captured CO2 to enhance existing products and produce new low-carbon or zero-emissions products; and |
| (4) | removing existing CO2 from the atmosphere using innovative direct air capture (DAC) technology in significant amounts for beneficial use and safe, permanent sequestration. |
However, as discussed in greater detail below, the Board of Directors believes that this proposal is misdirected because:
| ► | Occidental has already set and disclosed quantitative short-, medium- and long-term goals for Occidental’s Scope 1, 2 and 3 emissions that align with the goals of the Paris Agreement. |
| ► | Occidental’s targets are the result of a disciplined and rigorous target setting process, overseen by our Board of Directors, which integrates input from shareholders and other stakeholders, incorporates insights from scenario modeling and assessments and capitalizes on Occidental’s competitive strengths. The output of this robust process has been long-term targets recognized by the Transition Pathway Initiative (TPI) as ambitious enough to reach net zero by 2050 and aligned with TPI’s 1.5°C benchmark, and short- and medium-term targets aligned with externally-established pathways needed to meet these ambitions. |
| ► | Consistent with its existing climate-related disclosure, Occidental is committed to public reporting that updates its shareholders and other stakeholders on the company’s progress toward reaching its existing short-, medium- and long-term GHG emissions reduction goals. |
Follow This has questioned whether our emissions reduction targets are Paris-aligned. We believe that our targets are Paris-aligned and furthermore that our interim goals reflect a trajectory toward our long-term net-zero target that is consistent with the ramp-up of the commercialization of CCUS and DAC technology assumed in a range of external scenarios, including the International Energy Agency (IEA) Net Zero Emissions scenario, the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C mitigation pathway scenarios and Princeton University’s Net-Zero America research. These net-zero scenarios require all avenues of emissions mitigation, including renewables, energy efficiency, carbon removal and CCUS. We believe CCUS and DAC will play an essential role in addressing climate change and that Occidental is well-positioned to assist in scaling CCUS and DAC technologies given our 50 years of carbon management experience and substantial CO2 infrastructure and storage.
As we discussed with Follow This during our several conversations regarding the proposal and Occidental’s net-zero strategy and broader sustainability practices, the Scope 1, 2 and 3 emissions reduction targets and ambitions that Occidental has already set are inextricably linked to the strategy adopted by our executive team and our Board of Directors. In turn, this strategy has been designed to capitalize on the company’s competitive strengths. We believe that support for the proposal would undermine this strategy, create internal and external confusion and disrupt our business plans at a moment when our company should be focused on executing upon its mission to innovate for a lower-carbon future.
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Proposal 4: Shareholder Proposal
Additional Detail
Occidental has already set and disclosed quantitative short-, medium- and long-term goals for its Scope 1, 2 and 3 emissions that align with the goals of the Paris Agreement and are inextricably linked with the company’s long-term corporate strategy.
In 2020, Occidental committed to a pathway to achieve net zero for its operational and energy use emissions (Scope 1 and Scope 2) before 2040, with an ambition to do so before 2035, and for its total emissions inventory including use of its products (Scope 1, 2 and 3), with an ambition to do so before 2050. In keeping with that commitment, in 2021, Occidental established additional quantitative short-and medium-term targets for its Scope 1, 2 and 3 emissions that align with the goals of the Paris Agreement and support Occidental on its path to achieving net zero. These targets are disclosed in Occidental’s 2021 Climate Report and on Occidental’s dedicated sustainability webpage, and are summarized below.
Short-Term Targets
Occidental has committed to reducing Occidental’s combined Scope 1 and Scope 2 CO2 equivalent (CO2e) emissions from its worldwide operated assets by at least 3.68 million metric tons per year by 2024, compared to 2021 emissions. This target represents 13.3% of Occidental’s 2019 emissions and is aligned with Occidental’s sustainability-linked credit facility metrics, 2025 carbon intensity target and net-zero goal for 2040, which we believe is consistent with the Paris Agreement’s goal to limit global warming.
In addition, since 2018, the Compensation Committee has set annual climate-related targets for executive officers as part of Occidental’s annual cash incentive (ACI) award, directly linking compensation to sustainability performance. To measure performance, the Compensation Committee adopted two metrics: (1) emissions reduction efforts that align with Occidental’s 2040 net-zero goal for its operations and energy use (Scope 1 and Scope 2) and (2) carbon ventures and reduction projects that promote short-term progress toward its 2050 net-zero ambition for Occidental’s total carbon inventory, including the use of its products (Scope 3).
With respect to the emissions reduction efforts for Scope 1 and 2 emissions, Occidental adopted the following short-term targets for 2021 as part of Occidental’s ACI program:
| ► | developing and implementing an enhanced find it/fix it operational emissions program; |
| ► | deploying at least three new/additional technologies to advance Occidental’s areal and/or site specific GHG/methane emission surveys and excess emissions controls; |
| ► | eliminating or retrofitting approximately 900 high-bleed natural gas pneumatic controllers; |
| ► | implementing a project to increase hydrogen recovery from a facility of OxyChem (defined below) and repurposing the recovered hydrogen to generate zero-GHG emission energy to power OxyChem operations (expected to produce approximately 6,000 metric tons per year of CO2 emissions reductions); and |
| ► | limiting the upstream CO2e emissions intensity for new U.S. oil and gas field production activities to a level that is at least 10% below the 2018 value. |
With respect to carbon ventures and reduction projects to address Scope 3 emissions, Occidental adopted the following short-term targets for 2021 as part of its ACI program:
| ► | maintaining its first commercial-scale DAC facility on track for reaching the final investment decision by 2022; |
| ► | entering into at least one carbon capture, transport or sequestration joint venture; |
| ► | entering into at least three low-carbon product development transactions; and |
| ► | formalizing an internal carbon accounting function to enhance the monitoring and verification of CO2 and other GHG emissions. |
Each of these short-term Scope 3 targets and metrics were designed to advance Occidental’s progress toward developing low-carbon products or processes that ultimately reduce carbon emissions from products sold by Occidental.
In addition to Occidental’s enterprise-wide short-term Scope 1 and Scope 2 targets, Occidental’s subsidiary, Occidental Chemical Corporation (OxyChem), also has committed to reducing its Scope 1 and 2 emissions by 2.33% by 2025. OxyChem plans to achieve this target in part by reducing the GHG intensity of its products by 2.7% by 2025 through enhanced energy efficiency.
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Proposal 4: Shareholder Proposal
Medium-Term Targets
For Scope 1 and 2 emissions, Occidental’s medium-term ambition is to achieve net zero before 2035. Occidental anticipates being able to achieve this medium-term goal in part due to its GHG emissions reduction efforts combined with its planned CCUS, DAC and other low-carbon product developments, which will be centered around innovative technologies to remove CO2 directly from the atmosphere, and associated zero- or low-emissions power. Occidental’s pathway to achieving net zero before 2035 is also detailed in its 2021 Climate Report and Occidental’s dedicated sustainability webpage.
With respect to Scope 3 emissions, Occidental has set a medium-term target that is tied directly to developing and deploying CCUS and DAC technology that extends beyond Occidental’s own operations. Occidental strongly supports CCUS as a proven solution for reducing CO2 emissions from third parties in the value chain. Further, Occidental believes that DAC technology is necessary to remove atmospheric CO2, and that it will play a key role in Occidental’s net-zero pathway. Occidental’s medium-term Scope 1, 2 and 3 target is to facilitate at least 25 million metric tons per year of geologic storage or utilization of captured anthropogenic or atmospheric CO2 in its value chain by 2032 or other means of recognized climate mitigation technologically feasible in that time period.
Long-Term Targets
Finally, as stated above, Occidental plans to be net zero for its Scope 1 and 2 emissions before 2040, with the ambition to accomplish that goal before 2035. The focal point of Occidental’s long-term net-zero strategy is Oxy Low Carbon Ventures (OLCV), a business unit launched in 2018 to sustainably enhance Occidental’s business while providing impactful solutions for reducing global GHG emissions. OLCV is working to develop and commercialize carbon removal and CCUS technologies, as well as net-zero or low-carbon products and services. OLCV also partners with industrial operators to economically capture, transport and permanently and safely store CO2 in subsurface reservoirs, commercialize new products using captured CO2 and economically lower their carbon footprint by utilizing low- or zero-emissions power sources.
Occidental’s long-term Scope 3 goal is to achieve net zero before 2050 to meet the goals of the Paris Agreement. To achieve this, Occidental will rely on its GHG emissions reduction efforts, its development and advancement of CCUS and DAC technologies and the impact of low-carbon products and innovation through OLCV to support emissions reductions for Occidental’s customers and other third-parties in the value chain. Under Occidental’s strategy, it will calculate the amount of CO2 emitted each year from its products and intends to develop enough carbon capture, removal, storage and utilization of CO2e emissions to achieve its net-zero goal by 2050.
Occidental’s targets are the result of a disciplined and rigorous target setting process, overseen by our Board of Directors, that integrates input from shareholders and other stakeholders, incorporates insights from scenario modeling and assessments and capitalizes on Occidental’s competitive strengths.
Occidental’s Board of Directors, its committees and Occidental senior management work carefully together to implement and promote effective oversight of Occidental’s policies, procedures and management of Occidental’s climate-related risks and strategy. This includes the multi-year process that was deployed to set Occidental’s Scope 1, 2 and 3 emissions reduction goals. Occidental’s CEO, members of the Board of Directors and representatives of our operations, investor relations, legal and environmental and sustainability teams regularly engage with our shareholders and other stakeholders on climate matters and opportunities pertinent to Occidental, including our carbon management strategy. These inputs were instrumental to Occidental’s target setting process and the broader development of the company’s net-zero strategy. Similarly, we consider various energy scenarios, including the performance of our assets and reserves in modeling based on the IEA World Energy Outlook, to assess potential future climate-related impacts to our business. As discussed in our 2021 Climate Report, stress-test modeling based on the IEA Sustainable Development Scenario and other scenarios has been a crucial component of our risk management and strategy-setting process, and we expect to continue this practice in future reviews using the IEA Net Zero Emissions scenario and other sound, externally-developed scenarios.
In an analysis published in Science in October 2021, Occidental was recognized as the only oil and gas company who plans to reduce its GHG intensity below the 1.5°C benchmark by 2050.(1) Then, in November 2021, the TPI, a global initiative led by asset owners and supported by asset managers, announced its findings that Occidental was one of only three global oil and gas firms to have set emissions reduction targets ambitious enough to reach net zero by 2050 and to be aligned with TPI’s 1.5°C benchmark.
| (1) | How ambitious are oil and gas companies’ climate goals? (2021, October 22). Science, 374 (6566). https://www.science.org/doi/10.1126/science.abh0687 |
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Proposal 4: Shareholder Proposal
A cornerstone of Occidental’s net-zero strategy is the further development and utilization of our CCUS and DAC technology. Prominent international organizations such as the IPCC and the IEA have stressed that the deployment of CO2 removal technologies, such as DAC, are necessary to achieve the aggregate emissions reductions called for in the Paris Agreement. We believe that Occidental is well-positioned to provide these solutions based on our 50 years of carbon management experience and substantial CO2 infrastructure and storage. Target setting and forecasting around areas reliant upon technological innovation are inherently challenging, but we have confronted these challenges by setting short- and medium-term targets that incorporate our historical, on-the-ground experiences and expertise as well as carbon capture growth projection pathways from a range of external scenarios, including the IEA Net Zero Emissions scenario, the IPCC Special Report on Global Warming of 1.5°C mitigation pathway scenarios and Princeton University’s Net-Zero America research.
Occidental is committed to public reporting that updates its shareholders and other stakeholders on the company’s progress toward reaching our short-, medium- and long-term GHG emissions reduction goals.
Lastly, Occidental is dedicated to transparently reporting on our net-zero strategy and broader sustainability practices. Our 2021 Climate Report builds upon a history of reporting aligned with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), the disclosure standards set by the Sustainability Accounting Standards Board (SASB) and the IPIECA Sustainability Reporting Guidance, each of which were developed to establish consistent industry-specific disclosure across sustainability topics, including climate change, and facilitate communication between companies, investors and other key stakeholders. Occidental also regularly updates the company’s sustainability disclosure on its website and in other disclosures to provide updates on the company’s progress towards achieving its net-zero strategy, goals and ambitions.
The most recent detail on the progress toward our climate-related targets can be found in our 2021 Climate Report. We report performance using the American Petroleum Institute (API) Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry; IPIECA Sustainability Reporting Guidance for the Oil and Gas Industry; SASB standards and indicators for the oil and gas and chemicals sectors; IPCC Guidance for National Greenhouse Gas Inventories; and, with respect to U.S. operations, the U.S. EPA Mandatory Greenhouse Gas Reporting Rule.
We are committed to continue reporting on our progress toward achieving our short-, medium- and long-term Scope 1, 2 and 3 emissions reduction goals on Occidental’s website and in associated reports. We will also continue to engage proactively with our shareholders and other stakeholders to address and report on climate-related risks and opportunities associated with our operations and our value chain.
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As discussed above, Occidental is committed to being part of the climate solution and continues to carefully develop and implement policies and practices aimed at preserving the environment and reducing emissions. In light of the actions that Occidental has already taken and the reasons set forth above, we believe that the actions requested by the proposal would not be in the best interests of Occidental or its shareholders.
Accordingly, the Board of Directors recommends that you vote AGAINST the foregoing shareholder proposal.
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Questions and Answers About the Annual Meeting and Voting
1. WHY AM I RECEIVING THESE PROXY MATERIALS?
You are receiving these proxy materials because you held shares of Occidental’s common stock on March 11, 2022, the record date, which entitles you to notice of, and to vote at, Occidental’s 2022 Annual Meeting to be held on May 6, 2022, and at any adjournment or postponement thereof. The proxy materials include our Notice of Internet Availability, Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The proxy materials also include the proxy card for the 2022 Annual Meeting. The proxy materials contain detailed information about the matters to be voted on at the 2022 Annual Meeting and provide information about Occidental to assist you in making an informed decision when voting your shares.
Occidental began furnishing the proxy materials to shareholders on March 25, 2022 and will bear all expenses in connection with this solicitation.
2. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD ON OR ABOUT THE SAME TIME?
It means that your shares are registered differently or are held in more than one account. In order to vote all of your shares, please sign, date and return each proxy card or, if you vote via the Internet or telephone, vote once for each proxy card you receive.
3. WHO IS ENTITLED TO VOTE AT THE MEETING?
Owners of our common stock as of the close of business on March 11, 2022, the record date, are entitled to vote at the 2022 Annual Meeting. The shares owned include shares you held on that date (i) directly in your name as the shareholder of record (registered shareholder) and (ii) in the name of a broker, bank or other holder of record where the shares were held for you as the beneficial owner (in street name). Each share of common stock is entitled to one vote on each matter. As of the record date, there were 936,909,197 shares of our common stock outstanding and entitled to vote. There are no other voting securities of Occidental entitled to vote at the 2022 Annual Meeting outstanding. A complete list of registered shareholders entitled to vote at the 2022 Annual Meeting will be open to the examination of any shareholder during normal business hours for 10 days prior to the 2022 Annual Meeting at Occidental’s headquarters and during the 2022 Annual Meeting at www.virtualshareholdermeeting.com/ OXY2022, accessible using the 16-digit control number included on your Notice of Internet Availability, on your proxy card or in the voting instructions that accompanied your proxy materials.
4. HOW DO I VOTE MY SHARES?
If you are a shareholder of record as of the record date, you may vote by any of the following methods:
| ► | Voting by Mail. If you choose to vote by mail, simply complete the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. Your shares will be voted in accordance with the instructions on your proxy card. |
| ► | Voting by Internet. You may vote through the Internet by signing on to the website identified on your proxy card and following the procedures described on the website. Internet voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on your proxy card. The procedures permit you to give a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by Internet, you should not return your proxy card. |
| ► | Voting by Telephone. You may vote your shares by telephone by calling the toll-free telephone number provided on your proxy card. Telephone voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on your proxy card. The procedures permit you to give a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by telephone, you should not return your proxy card. |
| ► | Voting at the Meeting. The 2022 Annual Meeting will be held online to support the health and well-being of our employees and shareholders in the midst of the COVID-19 pandemic. Please have your 16-digit control number on your Notice of Internet Availability, proxy card or in the voting instructions that accompanied your proxy materials to participate in the 2022 Annual Meeting by visiting www.virtualshareholdermeeting.com/OXY2022. You will be able to vote your shares electronically during the 2022 Annual Meeting (other than shares held through our employee benefit plans, which must be voted prior to the meeting). |
If your shares are held in street name, your broker or other nominee has enclosed a proxy card for you to use to direct it how to vote your shares and may also provide additional voting instructions. Please instruct your broker or other nominee how to vote your shares using the form of proxy you received from it or otherwise in accordance with the voting instructions you receive.
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Questions and Answers About the Annual Meeting and Voting
Please return your completed proxy to your broker or other nominee or contact the person responsible for your account so that your vote can be counted. If your broker or other nominee permits you to provide voting instructions via the Internet or by telephone, you may vote that way as well.
Voting instructions relating to shares of our common stock held in the Occidental Petroleum Corporation 63Savings Plan and the Oxy Vinyls Savings Plan must be received no later than 11:59 p.m., Central Time, on the date that is two days prior to the 2022 Annual Meeting, so that the trustee of the plan (who votes the shares on behalf of plan participants) has adequate time to tabulate the voting instructions. Shares held in the Occidental Petroleum Corporation Savings Plan that are not voted or for which the trustee does not receive timely voting instructions will be voted by the trustee as directed by our Pension and Retirement Plan Administrative Committee, and shares held in the Oxy Vinyls Savings Plan that are not voted or for which the trustee does not receive timely voting instructions will be voted by the trustee as directed by the Oxy Vinyls Canada Company Retirement Committee.
5. CAN I REVOKE MY PROXY OR CHANGE MY VOTE?
Yes. You may revoke your proxy or change your vote before the 2022 Annual Meeting by filing a revocation with the Corporate Secretary of Occidental, by granting a new proxy bearing a later date (which automatically revokes the earlier proxy) whether made via the Internet, by telephone or by mail, or by attending the 2022 Annual Meeting virtually and voting online during the meeting.
If you hold your shares in street name, you may change your vote by contacting your broker or other nominee and following their instructions.
6. HOW WILL MY SHARES BE VOTED IF I SUBMIT A PROXY CARD BUT DO NOT SPECIFY HOW I WANT TO VOTE?
If you sign your proxy card and return it without marking any voting instructions, your shares will be voted at the 2022 Annual Meeting:
| ► | “FOR” the election of all director nominees (Proposal 1); |
| ► | “FOR” Proposals 2 and 3; |
| ► | “AGAINST” Proposal 4; and |
| ► | in the discretion of the persons named as proxies on all other matters that may properly come before the 2022 Annual Meeting or any adjournment or postponement thereof. |
7. HOW CAN I ATTEND THE 2022 ANNUAL MEETING?
In light of current information and guidance about the COVID-19 pandemic, to protect the health and well-being of our employees and shareholders, we have decided to hold the 2022 Annual Meeting solely by means of virtual communications. We intend to return to hosting in-person annual meetings in 2023.
You may participate in the 2022 Annual Meeting only if you were a shareholder as of March 11, 2022, the record date, or if you hold a valid proxy. You will be able to participate in the 2022 Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/OXY2022. You also will be able to vote your shares electronically during the 2022 Annual Meeting (other than shares held through our employee benefit plans, which must be voted prior to the meeting).
To participate in the 2022 Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability, on your proxy card or in the voting instructions that accompanied your proxy materials. If your shares are held in street name and your voting instruction form indicates that you may vote those shares through the http://www.proxyvote.com website, then you may access and participate in the 2022 Annual Meeting with the 16-digit access code indicated on that voting instruction form. Otherwise, shareholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least five days before the annual meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the 2022 Annual Meeting.
The 2022 Annual Meeting webcast will begin promptly at 9:00 a.m., Central Time. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:30 a.m., Central Time, and you should allow ample time for the check-in procedures.
8. WHAT IF I HAVE TECHNICAL DIFFICULTIES DURING CHECK-IN OR THE MEETING?
We will have technicians ready to assist you if you have any technical difficulties during check-in or the meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting log in page.
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Questions and Answers About the Annual Meeting and Voting
9. WHAT CONSTITUTES A QUORUM AT THE 2022 ANNUAL MEETING?
A majority of all outstanding shares entitled to vote at the 2022 Annual Meeting will constitute a quorum, which is the minimum number of shares that must be present or represented by proxy at the meeting to transact business. Abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present.
10. WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
Proposal 1 will be subject to a majority voting standard because the By-laws provide that in an uncontested election, directors are elected by the majority of votes cast with respect to such director, meaning that the number of votes cast “FOR” a director must exceed the number of votes cast “AGAINST” that director. Your broker may not vote your shares on this proposal unless you give voting instructions. Abstentions and broker non-votes have no effect on the vote.
Proposals 2, 3 and 4 require the affirmative vote of a majority of the shares present in person or by proxy at the 2022 Annual Meeting and entitled to vote on the subject matter. You may vote “FOR” or “AGAINST” or “ABSTAIN” when voting for each of these proposals. Abstentions will have the same effect as votes cast “AGAINST” each such proposal and broker non-votes, if any, have no effect on the vote.
11. WHAT HAPPENS IF I HOLD SHARES IN STREET NAME AND DO NOT SUBMIT VOTING INSTRUCTIONS? WHAT IS A BROKER NON-VOTE?
If your shares are held in street name and you do not submit voting instructions, under NYSE rules, your broker can vote your shares on Proposal 3, with respect to the ratification of the selection of the independent auditor, but not with respect to the other proposals to be considered.
A broker non-vote occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power for that particular item (or has discretionary voting power but chooses not to exercise it) and has not received instructions from the beneficial owner. Under the NYSE rules that govern brokers who are voting with respect to shares held in street name, brokers ordinarily have the discretion to vote on “routine” matters (e.g., ratifications of the selection of independent auditors) but not on non-routine matters (e.g., elections of directors and advisory votes on executive compensation).
12. IS THE EFFECTIVENESS OF ANY OF THE PROPOSALS CONDITIONED ON THE APPROVAL OF ANOTHER PROPOSAL?
None of the proposals recommended to be adopted by the Board are conditioned on the approval of another proposal.
13. HOW CAN I ASK QUESTIONS DURING THE 2022 ANNUAL MEETING?
As part of the 2022 Annual Meeting, we will hold a live question and answer session, during which we intend, time permitting, to answer all written questions pertinent to Occidental and meeting matters that are submitted before or during the meeting in accordance with the 2022 Annual Meeting’s Rules of Conduct, which will be posted on the 2022 Annual Meeting website. Questions may be submitted the day of or during the 2022 Annual Meeting through www.virtualshareholdermeeting.com/ OXY2022. Answers to questions that are not addressed during the meeting are expected to be published on our Investor Relations website shortly after the meeting. Questions and answers may be grouped by topic and substantially similar questions will be grouped and answered once. We reserve the right to edit or reject questions we deem inappropriate.
14. WHO SHOULD I CONTACT IF I HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING MY SHARES, OR IF I NEED ADDITIONAL COPIES OF THE PROXY MATERIALS?
If you have any questions, please contact Alliance Advisors, Occidental’s proxy solicitor, toll-free at 844-885-0175 or at 210-209-8052 or by email at oxy@allianceadvisors.com.
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General Information
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Occidental Petroleum Corporation, a Delaware corporation, for use at the Annual Meeting of StockholdersShareholders on May 4, 2018,6, 2022, and at any adjournment or postponement of the meeting.
Occidental’s Corporate Governance Policies and other governance policies, its Code of Business Conduct and the charters of the four BoardBoard’s committees are available at www.oxy.com/Investors/Governance, or by writing to the Corporate Secretary’s office, Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046.
Important Notice Regarding the Availability of Proxy Materials for the StockholderShareholder Meeting to beBe Held on May 4, 2018 6, 2022
This proxy statement and Occidental’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (Annual Report),2021 are available without charge on Occidental’s website at www.oxypublications.com or by writing to the Corporate Secretary’s office at the address above. The Annual Report contains the consolidated financial statements of Occidental and its subsidiaries and the reports of KPMG LLP, Occidental’s independent auditor.
Householding of Proxy Materials
AdmissionThe SEC permits Occidental, with your permission, to send a single set of proxy materials to any household at which two or more shareholders reside if Occidental believes they are members of the Annual Meeting same family. This rule is called “householding” and its purpose is to help reduce printing and mailing costs of proxy materials. To date, the company has not instituted this procedure, but may do so in the future.
Attendance at the Annual Meeting is limited to stockholders and authorized proxy holders.A number of brokerage firms have instituted householding. If you planand members of your household have multiple accounts holding shares of Occidental’s common stock, you may have received a householding notification from your broker. Please contact your broker directly if you have questions or wish to attend the Annual Meeting, orrevoke your decision to household. These options are available to you at any time. If you receive a single set of proxy materials as a result of householding by your broker and you would like to appointreceive separate copies of the Notice of Internet Availability, the Notice of Annual Meeting of Shareholders, Proxy Statement or Annual Report, you may submit a proxy holderrequest to attend the meeting, you must request an admission ticket by writing to theour Corporate Secretary’s officeSecretary at the address above, or by calling the Corporate Secretary’s office at 713-552-8654. Your request must be received by the Corporate Secretary’s office on or before May 2, 2018.
If you hold your shares of Occidental common stock in street name through a bank, broker or other holder of record, in addition to an admission ticket, you must bring proof of share ownership as of the record date, such as a bank or brokerage account statement and valid government-issued photo identification, such as a driver’s license or passport. If you want to vote your shares of Occidental common stock held in street name in person, you must get a legal proxy in your name from the bank, broker or other nominee that holds your shares of stock, and submit it with your vote.
If you are not a stockholder, you will be admitted only if you have an admission ticket, a valid legal proxy and valid government-issued photo identification, such as a driver’s license or passport.
For safety and security reasons, cell phones, laptops, tablets, recording equipment, other electronic devices, large bags, briefcases and packages will not be permitted in the Annual Meeting.
Voting Instructions and Information
| Voting Rights |
A Notice of Internet Availability or proxy card areis being mailed beginning on or about March 22, 2018,25, 2022, to each stockholdershareholder of record as of the close of business on March 9, 2018,11, 2022, which is the record date for the determination of stockholdersshareholders entitled to receive notice of, attend and vote at the 2022 Annual Meeting. As of the record date, Occidental had 765,668,874936,909,197 shares of common stock outstanding. A majority of the outstanding shares of common stock must be represented at the 2022 Annual Meeting, in person or by proxy, to constitute a quorum and to transact business. Abstentions and broker non-votes will be counted for purposes of determining whether a quorum is present. You will have one vote for each share of Occidental’s common stock you own. You may vote in person atonline during the 2022 Annual Meeting or by proxy. Proxies may be submitted by telephone or by internetInternet at www.proxyvote.comwww.proxyvote. com as explained on the Notice of Internet Availability and, if you received a proxy card or voting information form, by marking, signing and returning the card in the envelope provided. Voting via the internetInternet is a valid proxy voting method under the laws of the state of Delaware, Occidental’s state of incorporation. You may not cumulate your votes.
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2018 Notice of Annual Meeting and Proxy Statement 64
General Information
Pursuant to Occidental’s by-laws,By-laws, a complete list of stockholdersregistered shareholders entitled to vote at the 2022 Annual Meeting will be open to the examination of any stockholdershareholder during normal business hours for ten10 days prior to the 2022 Annual Meeting at Occidental’s headquarters and during the 2022 Annual Meeting at www.virtualshareholdermeeting.com/OXY2022, accessible using the Annual Meeting.16-digit control number included on your Notice of Internet Availability, on your proxy card or in the voting instructions that accompanied your proxy materials.
| Director Election Requirements |
Pursuant to Occidental’s by-laws,By-laws, in an uncontested election, directors are elected by the majority of votes cast with respect to such director, meaning that the number of votes cast “for”“FOR” a director must exceed the number of votes cast “against”“AGAINST” that director. Your broker may not vote your shares on this proposal unless you give voting instructions. Abstentions and broker non-votes have no effect on the vote. Any director who receives a greater number of votes “against”“AGAINST” his or her election than votes “for”“FOR” in an uncontested election must tender his or her resignation. Unless accepted earlier by the Board, of Directors, such resignation will become effective on October 31st31st of the year of the election.
| Voting of Proxies |
The Board of Directors has designated Ms. VickiMses. Hollub and Mr. H. Elliott Heide,Clark, and each of them, with the full power of substitution, to vote shares represented by all properly executed proxies. The shares will be voted in accordance with the instructions specified on the proxy card. If no instructions are specified on the proxy card or if you indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board, the shares will be voted:
| ► |
| ► |
| ► |
| ► | “AGAINST” the shareholder proposal requesting Occidental set and disclose short-, medium- and long-term GHG emissions reduction targets consistent with the Paris Agreement, if properly presented at the meeting (see page 76). |
In the absenceWe are not aware of instructionsany matters to the contrary, proxies will be voted in accordance with the judgment of the person exercising the proxy on any other matter presented at the 2022 Annual Meeting other than those described above. If any matters not described in accordance with Occidental’s by-laws.this proxy statement are properly presented at the meeting, the proxies will use their own judgment to determine how to vote your shares. If the meeting is adjourned or postponed, the proxies can vote your shares at the adjournment or postponement as well.
| Broker Votes |
If your shares are held in street name, under NYSE rules, your broker can vote your shares on Proposal 4,3, with respect to the ratification of the selection of the independent auditor, but not with respect to the election of directors, the advisory vote to approve named executive officer compensation or the approval of the Second Amendment to the 2015 LTIP.shareholder proposal (if properly presented) unless you give your broker instructions. If your broker does not have discretion (or has discretionary voting power but chooses not to exercise it) and you do not give the broker instructions, the votesthis will beresult in a broker non-votes,non-vote, which will have no effect on the vote for any matter properly introduced at the Annual Meeting.vote.
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You may revoke your proxy or change your vote before the Annual Meeting by filing a revocation with the Corporate Secretary of Occidental, by delivering to Occidental a valid proxy bearing a later date or by attending the Annual Meeting and voting in person.
| Confidential Voting Policy |
All proxies, ballots and other voting materials are kept confidential, unless disclosure is required by applicable law or expressly requested by you, anyyou include written comments on your proxy card or voting instruction form, or the proxy solicitation is contested. Occidental’s confidential voting policy is posted on Occidental’s website at www.oxy.com/Investors/Governance and also may be obtained by writing to the Corporate Secretary’s office, 5 Greenway Plaza, Suite 110, Houston, Texas 77046.
| Voting Results |
The voting results will be included in a Current Report on Form 8-K filed with the SEC and available through the SEC’s website or Occidental’s website at www.oxy.com, within four business days following the 2022 Annual Meeting, and may also be obtained by writing to the Corporate Secretary’s office at the address above.
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| General Information Solicitation Expenses |
The expense of this solicitation will be paid by Occidental. Morrow Sodali LLCAlliance Advisors has been retained to solicit proxies and to assist in the distribution and collection of proxy materialmaterials for a fee estimated at $18,000$21,000 plus reimbursement of out-of-pocket expenses. Occidental also will reimburse banks, brokers, nominees and related fiduciaries for the expense of forwarding soliciting material to beneficial owners of its common stock. In addition, Occidental’s officers, directors and employees may solicit proxies but will receive no additional or special compensation for such work.
Occidental Petroleum Corporation 65
StockholderShareholder Proposals for the 20192023 Annual Meeting of Stockholders
StockholdersShareholders interested in submitting a proposal for inclusion in the proxy statement and proxy card relating to the 20192023 Annual Meeting of StockholdersShareholders may do so by following the procedures in Rule 14a-8 under the Exchange Act. To be eligible for inclusion, stockholdershareholder proposals must be addressed to Occidental’s Corporate Secretary at Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046, and be received no later than the close of business (5:00 p.m. Central Time) on November 22, 2018.
25, 2022.
Under Occidental’s by-laws, stockholdersBy-laws, shareholders must follow certain procedures to introduce an item of business at an annual meeting that is not included in the proxy materials. These procedures require that any such item of business must be submitted in writing to the Corporate Secretary at Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046. Notice of the proposed item of business must be received betweenno earlier than January 6, 2023 and no later than the close of business (5:00 p.m. Central Time) on February 3, 2019 and February 23, 2019,5, 2023, and must include the information required by Occidental’s by-laws.By-laws. However, if the 2023 Annual Meeting is more than 30 days before or after the anniversary of the date of the 2022 Annual Meeting, the notice must be received no later than the close of business on the tenth day following the day on which notice of the date of the 2023 Annual Meeting was mailed or public disclosure of the meeting date was made, whichever occurs first. A copy of the by-lawsBy-laws may be obtained by writing to the Corporate Secretary at the address listed above.
In either case, the stockholder The shareholder submitting the proposal or a representative of the stockholdershareholder must present the proposal in person at the meeting.
The chairman of the meeting may refuse to allow the transaction of any item of business not presented in compliance with Occidental’s by-laws.By-laws. In addition, the individuals named as proxies solicited on behalf of the Board of Directors willmay have discretionary voting authority to vote against any such item of business.
Director Nominations for Directors for Term Expiring in 2019the 2023 Annual Meeting
| Nominating |
It is the policy of the Corporate Governance Nominating and Social Responsibility Committee (Nominating Committee) to consider nominees to the Board of Directors recommended by stockholders.shareholders. Pursuant to the Nominating Committee Policy, which is available at www.oxy.com/Investors/Governance, stockholderinvestors/governance/governance-policies/nominations-for-directors/, shareholder recommendations must be received by the Corporate Secretary of Occidental between September 1no earlier than January 6, 2023 and November 30 of the year preceding the annual meetingno later than February 5, 2023 to be considered by the NominatingGovernance Committee. Each recommendation must include the following information:
1. As to each person whom the stockholder proposes for election or re-election as a director:
| 1. | ||
| ► | The name, age, business address and residence address of the person; | |
| The principal occupation or employment of the person; |
| The class or series and number of shares of capital stock of Occidental which are owned beneficially or of record by the person; and |
| Any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to the rules and regulations of the SEC. |
2. As to the stockholder making the recommendation:
| 2. | ||
| ► | The name and address of record of such | |
| The class or series and number of shares of |
| 2022 PROXY STATEMENT | ||
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General Information
The stockholder’sshareholder’s recommendation must include the recommended person’s written consent to being named as a nominee and to serving as a director if elected.
In recentprior years, the NominatingGovernance Committee has identified director candidates through the use of independent search firms, third-party recommendations, and the recommendations of directors and executive officers. The NominatingGovernance Committee anticipates that, if a vacancy on the Board were to occur, it would use these sources as well as stockholdershareholder recommendations to identify candidates.
In deciding if a candidate recommended by a stockholdershareholder or identified by another source is qualified to be a nominee, it is the NominatingGovernance Committee’s policy to consider:
| Whether the candidate is independent as defined in Occidental’s Corporate Governance Policies and as applied with respect to Occidental and the |
| Whether the candidate has the business experience, character, judgment, acumen and time to commit in order to make an ongoing positive contribution to the Board; |
2018 Notice of Annual Meeting and Proxy Statement 66
| Whether the candidate would contribute to the Board achieving a diverse and broadly inclusive |
| Whether the candidate has the specialized knowledge or expertise, such as financial or audit experience, necessary to satisfy membership requirements for committees where specialized knowledge or expertise may be desirable. |
If there is a vacancy and the NominatingGovernance Committee believes that a recommended candidate has goodstrong potential for Board service, the NominatingGovernance Committee will arrange an interview with the candidate. Pursuant to its charter, the NominatingGovernance Committee will not recommend any candidate to the Board who has not been interviewed by the NominatingGovernance Committee.
In accordance with its charter, the NominatingGovernance Committee annually reviews its performance and reports its findings to the Board. The NominatingGovernance Committee also assists the Board in performing its self-evaluation, which includes an assessment of whether the Board has the necessary diversity of skills, backgrounds and experiences to meet Occidental’s ongoing needs.
| Advance Notice Procedure to Nominate Candidates |
Under Occidental’s by-laws, stockholdersBy-laws, shareholders may nominate a person for election to the Board at an annual meeting by complying with the advance notice procedures ofin the by-lawsBy-laws and attending the annual meeting to make the necessary motion. For the 20192023 Annual Meeting on Stockholders,of Shareholders, the notice must be received between September 1, 2018no earlier than January 6, 2023 and November 30, 2018no later than the close of business (5:00 p.m. Central Time) on February 5, 2023 and include the information required by Article III, Section 2 of the by-laws.Bylaws. However, if the 2023 Annual Meeting is more than 30 days before or after the anniversary of the date of the 2022 Annual Meeting, the notice must be received by no later than the close of business on the tenth day following the day on which notice of the date of the 2023 Annual Meeting was mailed or such public disclosure was made, whichever occurs first. In addition to satisfying the deadlines in the advance notice provisions of our By-Laws, a shareholder who intends to solicit proxies pursuant to Rule 14a-19 under the Exchange Act in support of nominees submitted under these advance notice provisions for the 2023 Annual Meeting must notify our Corporate Secretary in writing no later than March 7, 2023.
| Proxy Access Procedure to Nominate Candidates |
In 2015, with input from stockholders,shareholders, the Board amended Occidental’s by-lawsBy-laws to permit a group of up to 20 stockholders,shareholders, owning 3% or more of Occidental’s outstanding common stock continuously for at least three years to nominate and include in Occidental’s proxy materials directors constituting up to 20% of the Board, but not less than two directors, provided that the stockholder(s)shareholder(s) and the nominee(s) meet the requirements in Article III, Section 15 of the by-laws.By-laws. To be included in the 20192023 proxy materials, director nominations pursuant to Article III, Section 15 must be received no earlier than October 23, 201826, 2022 and no later than the close of business (5:00 p.m. Central Time) on November 22, 2018.25, 2022.
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General Information
Annual ReportForward-Looking Statements
This proxy statement and Occidental’s Annual Report are available on Occidental’s website and at www.oxypublications.com or by writing to the Corporate Secretary’s office, Occidental Petroleum Corporation, 5 Greenway Plaza, Suite 110, Houston, Texas 77046. The Annual Report contains the consolidated financial statements of Occidental and its subsidiaries and the reports of KPMG LLP, independent auditor.
Sincerely,
H. Elliott Heide
Vice President and Corporate Secretary
Houston, Texas
March 22, 2018
It is important that proxies be returned promptly. You are urged to vote your shares by telephone or internet as described in the instructions included on your Notice of Internet Availability or, if you received a paper copy of the proxy materials, by completing, signing, dating and returning the proxy card or voting instruction form in the enclosed envelope or by following the instructions outlined on the card to submit your proxy by telephone or internet.
Occidental Petroleum Corporation 67
ANNEX A: 2015 LONG-TERM INCENTIVE PLAN
2018 Notice of Annual Meeting and Proxy Statement 68
Notwithstanding the definition above, with respect to any Award that provides for a deferral of compensation under the Nonqualified Deferred Compensation Rules, a “Change in Control” for purposes of triggering the exercisability, settlement or other payment or distribution of such Award shall not occur unless a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation,” as defined in Treasury Regulation 1.409A-3(i)(5), has also occurred.
Occidental Petroleum Corporation 69
on leave of absence may be considered as still in the employ of the Company or any of its Subsidiaries for purposes of eligibility for participation in the Plan.
2018 Notice of Annual Meeting and Proxy Statement 70
Subject to Rule 16b-3 and section 162(m) of the Code, the Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement in the manner and to the extent it deems necessary or desirable to carry the Plan into effect, and the Committee shall be the sole and final judge of that necessity or desirability. Notwithstanding the foregoing, the Committee shall not have any discretion to waive or modify (A) any term or condition of any Section 162(m) Award if such discretion would cause the Award to fail to qualify as “performance-based compensation” (unless the Company determines that it is no longer necessary or appropriate for such Award to qualify as “performance-based compensation”“forward-looking statements” within the meaning of section 162(m)the “safe harbor” provisions of the Code) or (B) the termsPrivate Securities Litigation Reform Act of payment of any Award that provides for a deferral of compensation under the Nonqualified Deferred Compensation Rules if such waiver or modification would subject a Participant to additional taxes under the Nonqualified Deferred Compensation Rules.
Occidental Petroleum Corporation 71
Award to fail to qualify as “performance-based compensation,” and (ii) delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Company or a Subsidiary or to third parties.
2018 Notice of Annual Meeting and Proxy Statement 72
avoid double counting (as, for example, in the case of tandem or Conversion Awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.
Occidental Petroleum Corporation 73
of a parent or Subsidiary corporation of the Company. Except as otherwise provided in Section 8, no term of the Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification. ISOs shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Company’s stockholders. Notwithstanding the foregoing, the Fair Market Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or Subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) subject to any other ISO (within the meaning of section 422 of the Code)) of the Company or a parent or Subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) that first becomes purchasable by a Participant in any calendar year may not (with respect to that Participant) exceed $100,000, or such other amount as may be prescribed under section 422 of the Code or applicable regulations or rulings from time to time. As used in the previous sentence, Fair Market Value shall be determined as of the date the ISOs are granted. Failure to comply with this provision shall not impair the enforceability or exercisability of any Option, but shall cause the excess amount of shares to be reclassified in accordance with the Code.
2018 Notice of Annual Meeting and Proxy Statement 74
in additional shares of Restricted Stock, applied to the purchase of additional Awards under the Plan or deferred without interest to the date of vesting of the associated Award of Restricted Stock;provided, that, to the extent applicable, any such election is intended to comply with the Nonqualified Deferred Compensation Rules. Unless otherwise determined by the Committee and specified in the applicable Award Agreement, Stock distributed in connection with a Stock split or Stock dividend, and other property (other than cash) distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. Except in the case of a Retention Award, dividends with respect to any Performance Award shall be subject to the same performance goals as the Performance Award with respect to which the dividends accrue and shall not be paid until such Performance Award has vested and been earned.
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Award under the Plan, to Eligible Persons in such amounts and subject to such other terms (including the achievement of performance goals pursuant to Section 6(k) hereof and/or future service requirements) as the Committee in its discretion determines to be appropriate.
2018 Notice of Annual Meeting and Proxy Statement 76
of critical projects or processes; (ff) improvement of financial ratings; (gg) interest coverage; (hh) inventory turns; (ii) inventory; (jj) market share; (kk) net income per share; (ll) net income; (mm) operating cash flow; (nn) operating expenses (including, but not limited to, lease operating expenses, severance taxes and other production taxes, gathering and transportation, general and administrative costs, and other components of operating expenses); (oo) operating income; (pp) operating profit or net operating profit; (qq) operating ratio; (rr) overhead cost; (ss) pre-tax earnings; (tt) pretax income or after tax income; (uu) pre-tax margin; (vv) proceeds from dispositions; (ww) production efficiency; (xx) production growth; (yy) production volumes; (zz) regulatory compliance; (aaa) reserve growth; (bbb) reserve replacement; (ccc) return on assets; (ddd) return on average assets; (eee) return on average equity; (fff) return on capital employed; (ggg) return on equity; (hhh) return on investment; (iii) return on investors’ capital; (jjj) return on net assets; (kkk) return on operating revenue; (lll) revenues; (mmm) safety performance and/or incident rate; (nnn) sales; (ooo) satisfactory internal or external audits; (ppp) shareholder value; (qqq) stock price appreciation; (rrr) stockholder equity; (sss) total cost per barrel or barrel of oil equivalent (BOE); (ttt) total stockholder return (“TSR”); (uuu) unit costs; (vvv) working capital; or (www) any of the above goals determined on an absolute or relative basis, as a ratio with other business criteria set forth in this Section 6(k)(i)(B) (1), or as compared to the performance of a published or special index deemed applicable by the Committee1995, including but not limited to statements about Occidental’s expectations, beliefs, plans or forecasts. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties, many of which involve factors or circumstances that are beyond Occidental’s control. Actual results may differ from anticipated results, sometimes materially, and reported or expected results should not be considered an indication of future performance.
Factors that could cause actual results to differ and that may affect Occidental’s results of operations and financial position appear in Part I, Item 1A “Risk Factors” of Occidental’s Annual Report and in Occidental’s other filings with the Standard & Poor’s 500 Stock IndexSEC.
Because the factors referred to above could cause actual results or a group of comparable companies, pre-taxoutcomes to differ materially from those expressed or after-tax, before or after special charges, orimplied in any combinationforward-looking statements, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the foregoing. Unless otherwise stated, such performance goal needdate of this communication and, unless legally required, Occidental does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.
In addition, ESG-related statements are aspirational, are not guarantees or promises that related goals or targets may be met, and may be based upon an increase or positive result under a particular business criterion set forthon standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future.
Website references throughout this Section 6(k)(i)(B)(1)proxy statement are provided for convenience only, and could include, for example, maintaining the status quo or limiting economic losses (measured in each casecontent on the referenced websites is not incorporated by reference into this proxy statement.
| 2022 PROXY STATEMENT | ||
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Reconciliations to specific business criteria set forthGAAP
This proxy statement refers to cash return on capital employed (CROCE) and free cash flow, which are supplemental measures not calculated in this Section 6(k)(i)(B)(1)). The terms above are used as applied underaccordance with generally accepted accounting principles (if applicable) and in the Company’s financial reporting.United States (GAAP).
Occidental Petroleum Corporation 77
savingsas cash flows from operating activities before changes in working capital plus any distributions from Western Midstream Partners, LP which are included in cash flows from investing activities divided by average total debt plus stockholders’ equity (average of the beginning and deferred profit-sharing plan or deferred compensation planending totals for the fiscal year; (m) itemscurrent period). Management believes that CROCE is useful to investors when comparing our profitability and the Boardefficiency with which management has determined doemployed capital over time relative to other companies. CROCE is not represent core operations of the Company, specifically including but not limitedconsidered to interest, expenses, taxes, depreciation and depletion, amortization and accretion charges; (n) marked-to-market adjustments for financial instruments; or (o) any other extraordinary events or occurrences identified by the Committee, including but not limitedbe an alternative to such items described in management’s discussion and analysis of financial condition and results of operations or the financial statements and notes thereto appearing in the Company’s annual report to stockholders for the applicable year. In addition, Section 162(m) Awards may be adjusted by the Committeenet income reported in accordance with the provisionsGAAP.
| CASH RETURN ON CAPITAL EMPLOYED (CROCE) (NON-GAAP) | ||||||||||||
| $ in millions | 2021 | 2020 | ||||||||||
| Cash flow from operating activities (GAAP) | $ | 10,434 | ||||||||||
| Plus: Changes in operating assets and liabilities and other operating, net | 1,426 | |||||||||||
| Adjusted cash flow from operating activities (Non-GAAP) | A | $ | 11,860 | |||||||||
| Debt, net at December 31, 2021 | $ | 29,617 | ||||||||||
| Total stockholder’s equity at December 31, 2021 | 20,327 | |||||||||||
| Total debt and stockholder’s equity at December 31, 2021 | $ | 49,944 | ||||||||||
| Debt, net at December 31, 2020 | $ | 36,185 | ||||||||||
| Total stockholder’s equity at December 31, 2020 | 18,573 | |||||||||||
| Total debt and stockholder’s equity at December 31, 2020 | $ | 54,758 | ||||||||||
| Average capital employed (Non-GAAP) | B | $ | 52,351 | |||||||||
| CROCE (Non-GAAP) | A/B | 22.7 | % | |||||||||
Operating cash flow before working capital and free cash flow are non-GAAP measures. Occidental defines operating cash flow before working capital as operating cash from continuing operations less working capital and free cash flow as operating cash flow before working capital less capital expenditures. These non-GAAP measures are not meant to disassociate those items from management’s performance, but rather are meant to provide useful information to investors interested in comparing Occidental’s performance between periods. Reported operating cash flow from continuing operations is considered representative of Sections 8(b) through 8(h) of the Plan. The adjustments described in this paragraph shall only be made, in each case, to the extent that such adjustment in respect of a Section 162(m) Award would not cause the Award to fail to qualify as “performance-based compensation” under section 162(m) of the Code, unless the Company determines that it is no longer necessary or appropriate for such Award to qualify as “performance-based compensation” within the meaning of section 162(m) of the Code.
2018 Notice of Annual Meeting and Proxy Statement 78
be Covered Employees within the meaning of section 162(m) of the Code and the regulations thereunder shall, if designated by the Committee as Section 162(m) Awards, constitute “performance-based compensation” within the meaning of section 162(m) of the Code and regulations thereunder. Accordingly, the terms governing such Section 162(m) Awards shall be interpreted in a manner consistent with section 162(m) of the Code and regulations thereunder and, if any provision of the Plan as in effect on the date of adoption of any Award Agreements relating to Performance Awards that are designated as Section 162(m) Awards does not comply or is inconsistent with the requirements of section 162(m) of the Code or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.
Occidental Petroleum Corporation 79
Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis (which may be required by the Committee or permitted at the election of the Participant on terms and conditions established by the Committee);provided,however, that any such deferred or installment payments will be set forth in the Award Agreement and/or otherwise made in a manner that will not result in additional taxes under the Nonqualified Deferred Compensation Rules. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. The Plan shall not constitute an “employee benefit plan” for purposes of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
2018 Notice of Annual Meeting and Proxy Statement 80
Occidental Petroleum Corporation 81
may effect one or more of the following alternatives, which may vary among individual holders and which may vary among Options, SARs or other Awards held by any individual holder: (A) provide for a cash payment with respect to outstanding Awards by requiring the mandatory surrender to the Company by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then vested or exercisable pursuant to the Plan) as of a date, before or after such Change in Control, specified by the Committee, in which event the Committee shall thereupon cancel such Awards (with respect to all shares subject to such Awards) and pay to each holder an amount of cash (or other consideration including securities or other property) per share equal to (1) with respect to any Option or SAR, the excess, if any, of the amount calculated in Section 8(g) (the “Change in Control Price”) with respect to the shares subject to such Option or SAR over the Exercise Price or grant price applicable to such Option or SAR (except that to the extent the Exercise Price or grant price under any such Option or SAR is equal to or exceeds the Change in Control Price, in which case no amount shall be payable with respect to such Option or SAR), or (2) with respect to any other Award, the Change in Control Price,long term, and provided, that, in either case, the Committee may determine that, notwithstanding the cancellation of all shares subject to an Award, any suchoperating cash payment shall only be made for shares for which such Award is vested and/or exercisable; (B) provide for the assumption, substitution or continuation of Awards by the successor company or a parent or subsidiary thereof; or (C) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control;provided,however, that the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding.
2018 Notice of Annual Meetingflow before working capital and Proxy Statement 82
and other tax obligations relating to any Award. The Committee shall determine the form of payment of such tax withholding obligations, including without limitationfree cash or cash equivalents, Stock (including previously owned shares or through a cashless or net settlement or a broker-assisted sale or other reduction of the amount of shares otherwise issuable pursuant to the Award), other property, or any other legal consideration the Committee deems appropriate. This shall include authority to, in the discretion of the Committee with respect to any Participant who is subject to Rule 16b-3 (which Committee, for these purposes, shall be comprised of two or more “nonemployee directors” within the meaning of Rule 16b-3(b)(3) or the full Board and which such discretion mayflow are not be delegated to management), withhold, sell or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis; provided, that if such tax obligations are satisfied through the withholding of shares of Stock that are otherwise issuable to the Participant pursuant to an Award (or through the surrender of shares of Stock by the Participant to the Company), the number of shares of Stock that may be so withheld (or surrendered) shall be limited to the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such tax liabilities determined based on the applicable minimum statutory withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, as determined by the Committee.
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desirable, including incentive arrangements and awards that do not constitute “performance-based compensation” under section 162(m) of the Code. Nothing contained in the Plan shall be construed to prevent the Company or any of its Subsidiaries from taking any corporate action that is deemed by the Company or such Subsidiaryconsidered to be appropriate oralternatives to reported operating cash flow in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any of its Subsidiaries as a result of any such action.accordance with GAAP.
| FREE CASH FLOW (NON-GAAP) | ||||
| $ in millions | 2021 | |||
| Operating cash flow from continuing operations (GAAP) | $ | 10,253 | ||
| Plus: Working capital and other, net | 1,426 | |||
| Operating cash flow from continuing operations before working capital (Non-GAAP) | $ | 11,679 | ||
| Less: Capital Expenditures (GAAP) | $ | (2,870 | ||
| Free Cash Flow (Non-GAAP) | $ | 8,809 | ||
2018 Notice of Annual Meeting and Proxy Statement 84
grant, vesting, exercise, settlement, and/or sale of any Award (or the Stock underlying such Award) granted hereunder, or should be interpreted as such and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred
Prepared by the Employee on account of non-compliance with the Nonqualified Deferred Compensation Rules. Notwithstanding any provision in the Plan or an Award Agreement to the contrary, in the event that a “specified employee” (as defined under the Nonqualified Deferred Compensation Rules) becomes entitled to a payment under an Award that would be subject to additional taxes and interest under section 409A of the Code if the Participant’s receipt of such payment or benefit is not delayed until the earlier of (i) the date of the Participant’s death, or (ii) the date that is six months after the Participant’s “separation from service” as defined under the Nonqualified Deferred Compensation Rules (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date. The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith. To the extent that the Board determines an Award is subject to the Nonqualified Deferred Compensation Rules and fails to comply with the Nonqualified Deferred Compensation Rules, the Board reserves the right (without any obligation to do so) to amend, restructure, terminate or replace such Award in order to cause the Award to either not be subject to section 409A or to comply with the applicable provisions of such section.
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This First Amendment (the “First Amendment”) to the Occidental Petroleum Corporation 2015 Long-Term Incentive Plan (the “Plan”), is made effective as of July 14, 2016 (the “Amendment Effective Date”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan.
WHEREAS,Occidental Petroleum Corporation, a Delaware corporation (the “Company”), previously adopted the Plan;
WHEREAS,Section 8 of the Plan provides, among other things, that, subject to certain exceptions, the Board may amend the Plan without the consent of the Company’s stockholders and the Committee may amend an outstanding Award granted under the Plan without the consent of Participants under the Plan; and
WHEREAS,(i) the Board desires to amend the Plan in order to enable the Company to withhold amounts of withholding and other taxes due with respect to an Award (including outstanding Awards) from shares of Stock (including shares of Stock otherwise issuable under an Award) at the maximum statutory withholding rate applicable to a Participant and (ii) the Committee desires to establish certain withholding procedures with respect to outstanding Awards granted on or before the Amendment Effective Date, in each case, pursuant to the First Amendment.
NOW, THEREFORE, BE IT RESOLVED,that, the Plan shall be amended as of the Amendment Effective Date, as set forth below:
“(b)Tax Withholding. The Company and any of its Subsidiaries are authorized to withhold from any Award granted, or any payment relating to an Award under the Plan, including from a distribution of Stock, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, its Subsidiaries and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. The Committee shall determine the form of payment of such tax withholding obligations, including without limitation cash or cash equivalents, Stock (including previously owned shares or through a cashless or net settlement or a broker-assisted sale or other reduction of the amount of shares otherwise issuable pursuant to the Award), other property, or any other legal consideration the Committee deems appropriate. This shall include authority to, in the discretion of the Committee with respect to any Participant who is subject to Rule 16b-3 (which Committee, for these purposes, shall be comprised of two or more “nonemployee directors” within the meaning of Rule 16b-3(b)(3) or the full Board and which such discretion may not be delegated to management), withhold, sell or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis; provided, that if such tax obligations are satisfied through the withholding of shares of Stock that are otherwise issuable to the Participant pursuant to an Award (or through the surrender of shares of Stock by the Participant to the Company), the number of shares of Stock that may be so withheld (or surrendered) shall not exceed the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding (or surrender) equal to the aggregate amount of such obligations determined based on the maximum statutory withholding rates in the applicable Participant’s jurisdiction that may be utilized without creating adverse accounting treatment with respect to such Award, as determined by the Committee.
FURTHER RESOLVED,that except as amended hereby, the Plan and each outstanding Award Agreement shall continue to read in their current states and are specifically ratified and reaffirmed.
2018 Notice of Annual Meeting and Proxy Statement 86
THIS SECOND AMENDMENT (the “Second Amendment”) to the Occidental Petroleum Corporation 2015 Long-Term Incentive Plan, as amended from time to time (the “Plan”), is made by Occidental Petroleum Corporation, a Delaware Corporation (the “Company”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan.
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WHEREAS,the Company previously adopted the Plan, under which the Company is authorized to grant equity-based incentive awards to certain employees, non-employee directors and other service providers of the Company and its subsidiaries;
WHEREAS,Section 8(a) of the Plan provides that the Company’s board of directors (the “Board”) may amend the Plan from time to time without approval of the stockholders of the Company, except that any amendment to the Plan, including any increase in any share limitation, of which stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the shares of common stock of the Company may then be listed or quoted, must be approved by the Company’s stockholders not later than the next annual meeting of stockholders following such Board action;
WHEREAS,the Board now desires to amend the Plan to increase the number of shares of common stock, par value $0.20 per share, of the Company (the “Shares”) available for awards under the Plan by 45,000,000 Shares, subject to approval by the stockholders of the Company; and
WHEREAS,the Board has determined that the Second Amendment shall be made effective as of February 8, 2018 (the “Amendment Effective Date”), subject to approval by the stockholders of the Company.
NOW, THEREFORE, BE IT RESOLVED,the Plan shall be amended as of the Amendment Effective Date, subject to approval by the stockholders of the Company, as set forth below:
Section 4(a) of the Plan is hereby deleted and replaced in its entirety with the following:
Overall Number of Shares Available for Delivery. Subject to the limitations set forth in the Plan, the total number of shares of Stock reserved and available for issuance in connection with Awards under the Plan shall not exceed 80,000,000 shares. In addition to the 80,000,000 shares, any shares subject to awards under the Occidental Petroleum Corporation 2005 Long-Term Incentive Plan (the “2005 Plan”) that, following the Effective Date, are forfeited, cancelled or terminated, expire unexercised or are settled in cash in lieu of Stock will also be available for the grant of Awards under the Plan. Any shares of Stock issued in connection with Awards other than Options and SARs shall be counted against the limits described above as three (3) shares of Stock for every one (1) share issued in connection with such Award or by which the Award is valued by reference as three (3) shares. A maximum of 80,000,000 shares of Stock of the total authorized under this Section 4(a) may be granted as Incentive Stock Options. Notwithstanding anything contrary in the Plan, no Participant may be granted, during any calendar year, an Award consisting of Options or SARs that are exercisable for more than two million (2,000,000) shares of Stock. The limitations of this Section 4(a) shall be subject to the adjustment provisions of Section 8.
RESOLVED FURTHER,that except as amended hereby, the Plan is specifically ratified and reaffirmed.
Occidental Petroleum Corporation 87
This Proxy Statement is printed on Forest Stewardship Council®-certified paper that contains wood from well-managed forests, controlled sources and recycled wood or fiber. ON THE COVER:Occidental’s Permian Basin operations,Gaines County, Texas
www.argyleteam.com
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5 GREENWAY PLAZA, SUITE 110
HOUSTON, TEXAS 77046-0521
(713) 215-7000
WWW.OXY.COM
 5 GREENWAY PLAZA, SUITE 110 HOUSTON, TX 77046 |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the During The Meeting - Go to www.virtualshareholdermeeting.com/OXY2022 You may attend the meeting via the Internet and vote during the meeting. Have the sixteen-digit control number that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until 11:59 p.m. Eastern Time on May 5, 2022 and, for participants of the Occidental Petroleum Corporation Savings Plan and the Retirement Savings Program for employees of Oxy Vinyls Canada Co., until 11:59 p.m. Eastern Time on May 3, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Occidental in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the |
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
| D71965-Z81740 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY | |
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
OCCIDENTAL PETROLEUM CORPORATION This proxy is solicited on behalf of the Board of Directors of Occidental Petroleum Corporation. The Board of Directors recommends a vote "FOR" each nominee listed in Proposal 1. |
| 1. | Election of Directors | |||||||
| Nominees: | For | Against | Abstain | |||||
| 1a. | Vicky A. Bailey | ☐ | ☐ | ☐ | ||||
| 1b. | Stephen I. Chazen | ☐ | ☐ | ☐ | ||||
| 1c. | Andrew Gould | ☐ | ☐ | ☐ | ||||
| 1d. | Carlos M. Gutierrez | ☐ | ☐ | ☐ | ||||
| 1e. | Vicki Hollub | ☐ | ☐ | ☐ | ||||
| 1f. | William R. Klesse | ☐ | ☐ | ☐ | ||||
| 1g. | Jack B. Moore | ☐ | ☐ | ☐ | ||||
| 1h. | Avedick B. Poladian | ☐ | ☐ | ☐ | ||||
| 1i. | Robert M. Shearer | ☐ | ☐ | ☐ | ||||
| The Board of Directors recommends a vote "FOR" Proposals 2 and 3. | For | Against | Abstain | |||
| 2. | Advisory Vote to Approve Named Executive Officer Compensation | ☐ | ☐ | ☐ | ||
| 3. | Ratification of Selection of KPMG as Occidental's Independent Auditor | ☐ | ☐ | ☐ | ||
| The Board of Directors recommends a vote "AGAINST" Proposal 4. | For | Against | Abstain | |||
| 4. | Shareholder Proposal Requesting Occidental Set and Disclose Quantitative Short-, Medium- and Long-Term GHG Emissions Reduction Targets Consistent with the Paris Agreement | ☐ | ☐ | ☐ | ||
| THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD OF DIRECTORS RECOMMENDS. | ||||||
Please sign exactly as your name(s) appear(s) on the proxy. If the shares are held in joint tenancy, all persons should sign. Trustees, administrators, etc. should include their title and authority. Corporations should provide the full name of the corporation and the title of the authorized officer signing the proxy.
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and 2022 Proxy Statement and 2021 Annual Report are available at www.proxyvote.com.
| D71966-Z81740 |
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Friday, May 6, 2022 at 9:00 a.m. Central Time
www.virtualshareholdermeeting.com/OXY2022
 | proxy card |
VICKI HOLLUB and NICOLE E. CLARK, and each of them, with full power of substitution, are hereby authorized to represent and to vote the shares of the undersigned in OCCIDENTAL PETROLEUM CORPORATION ("Occidental") as directed on the reverse side of this proxy card and, in their discretion, on all other matters which may properly come before the Annual Meeting of Shareholders to be held on May 6, 2022, and at any adjournment or postponement thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting of Shareholders by a reasonable time before the proxy solicitation was made), as if the undersigned were present and voting at the meeting.
The shares represented by this proxy will be voted as directed on the reverse side of this proxy card. Where no direction is given, such shares will be voted in accordance with the recommendation of the Board of Directors to the extent permitted by law; therefore, if no direction is made, this proxy will be voted FOR the election of each director nominee listed in Proposal 1; FOR Proposals 2 and 3; AGAINST Proposal 4; and, in the proxies' discretion, in accordance with the recommendation of the Board of Directors, on any other matters coming before the meeting or any adjournment or postponement thereof. In the event any of the nominees named on the reverse side of this proxy card is unavailable for election or unable to serve, the shares represented by this proxy may be voted for a substitute nominee selected by the Board of Directors.
Your proxy will be kept confidential in accordance with the confidential voting policy described in the Proxy Statement and available on Occidental's website.
Continued and to be signed on reverse side
| 5 GREENWAY PLAZA, SUITE 110 HOUSTON, TX 77046 |  VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information until 11:59 p.m. Eastern Time on May 3, 2022. Have your voting instruction card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until 11:59 p.m. Eastern Time on May 3, VOTE BY MAIL Mark, sign and date your |
| |
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS.
Please sign exactly as your name(s) appear(s) on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
|
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
| D71967-Z81739 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY | |
| THIS VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED. | |
OCCIDENTAL PETROLEUM CORPORATION This card is solicited on behalf of the Board of Directors of Occidental Petroleum Corporation. The Board of Directors recommends a vote "FOR" each nominee listed in Proposal 1. |
| 1. | Election of Directors | |||||||
| Nominees: | For | Against | Abstain | |||||
| 1a. | Vicky A. Bailey | ☐ | ☐ | ☐ | ||||
| 1b. | Stephen I. Chazen | ☐ | ☐ | ☐ | ||||
| 1c. | Andrew Gould | ☐ | ☐ | ☐ | ||||
| 1d. | Carlos M. Gutierrez | ☐ | ☐ | ☐ | ||||
| 1e. | Vicki Hollub | ☐ | ☐ | ☐ | ||||
| 1f. | William R. Klesse | ☐ | ☐ | ☐ | ||||
| 1g. | Jack B. Moore | ☐ | ☐ | ☐ | ||||
| 1h. | Avedick B. Poladian | ☐ | ☐ | ☐ | ||||
| 1i. | Robert M. Shearer | ☐ | ☐ | ☐ | ||||
| The Board of Directors recommends a vote "FOR" Proposals 2 and 3. | For | Against | Abstain | |||
| 2. | Advisory Vote to Approve Named Executive Officer Compensation | ☐ | ☐ | ☐ | ||
| 3. | Ratification of Selection of KPMG as Occidental's Independent Auditor | ☐ | ☐ | ☐ | ||
| The Board of Directors recommends a vote "AGAINST" Proposal 4. | For | Against | Abstain | |||
| 4. | Shareholder Proposal Requesting Occidental Set and Disclose Quantitative Short-, Medium- and Long-Term GHG Emissions Reduction Targets Consistent with the Paris Agreement | ☐ | ☐ | ☐ | ||
| THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED AS DIRECTED ABOVE. WHERE NO INSTRUCTION IS GIVEN, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE DIRECTION OF THE PLAN'S ADMINISTRATION COMMITTEE. IN ACCORDANCE WITH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, YOUR VOTE MUST BE KEPT CONFIDENTIAL BY THE PLAN'S TRUSTEE. | ||||||
Please sign exactly as your name(s) appear(s) on the card. If the shares are held in joint tenancy, all persons should sign. Trustees, administrators, etc. should include their title and authority. Corporations should provide the full name of the corporation and the title of the authorized officer signing the card.
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and 2022 Proxy Statement and 2021 Annual Report are available at www.proxyvote.com.
| D71968-Z81739 |
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Friday, May 6, 2022 at 9:00 a.m. Central Time
www.virtualshareholdermeeting.com/OXY2022
| voting instruction card |
TO THE BANK OF NEW YORK MELLON,
TRUSTEE OF THE OCCIDENTAL PETROLEUM CORPORATION SAVINGS PLAN (THE "PLAN"):
I acknowledge receipt of the Notice of Annual Meeting of Shareholders of Occidental Petroleum Corporation ("Occidental") to be held on May 6, 2022, and the Proxy Statement furnished in connection with the solicitation of proxies by Occidental's Board of Directors. I understand that the Trustee will vote the shares which are held for my account pursuant to the Plan in the manner indicated on the reverse side of this card and, in your discretion, on all other matters which may properly come before such meeting and at any adjournment or postponement thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting of Shareholders by a reasonable time before the proxy solicitation was made).
My vote for the election of directors is indicated on the reverse side. Nominees are: Vicky A. Bailey, Stephen I. Chazen, Andrew Gould, Carlos M. Gutierrez, Vicki Hollub, William R. Klesse, Jack B. Moore, Avedick B. Poladian and Robert M. Shearer. In the event any of the foregoing nominees are unavailable for election or unable to serve, shares represented by this card may be voted for a substitute nominee selected by the Board of Directors.
I understand that in the event I do not return this card, or it is not received by May 3, 2022, any shares held for my account in the Plan will be voted by you, as Trustee, in accordance with the direction of the Plan's Administration Committee.
Continued and to be signed on reverse side
| 5 GREENWAY PLAZA, SUITE 110 HOUSTON, TX 77046 | VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information until 11:59 p.m. Eastern Time on May 3, 2022. Have your voting instruction card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until 11:59 p.m. Eastern Time on VOTE BY MAIL Mark, sign and date your |
| |
THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED AS DIRECTED ABOVE. WHERE NO INSTRUCTION IS GIVEN, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE DIRECTION OF THE PLAN'S ADMINISTRATION COMMITTEE. IN ACCORDANCE WITH THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, YOUR VOTE MUST BE KEPT CONFIDENTIAL BY THE PLAN'S TRUSTEE.
Please sign exactly as your name(s) appear(s) on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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|
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
| KEEP THIS PORTION FOR YOUR RECORDS | ||
| DETACH AND RETURN THIS PORTION ONLY | ||
| THIS | ||
OCCIDENTAL PETROLEUM CORPORATION | ||||||
This card is solicited on behalf of the Board of Directors of Occidental Petroleum Corporation. The Board of Directors recommends a vote nominee listed in Proposal 1. | ||||||
| 1. | |||||||||
| Election of Directors | |||||||||
| Nominees: | For | Against | Abstain | ||||||
| 1a. | Vicky A. Bailey | ☐ | ☐ | ☐ | |||||
| 1b. | Stephen I. Chazen | ☐ | ☐ | ☐ | |||||
| 1c. | Andrew Gould | ☐ | ☐ | ☐ | |||||
| 1d. | Carlos M. Gutierrez | ☐ | ☐ | ☐ | |||||
| 1e. | Vicki Hollub | ☐ | ☐ | ☐ | |||||
| 1f. | William R. Klesse | ☐ | ☐ | ☐ | |||||
| 1g. | Jack B. Moore | ☐ | ☐ | ☐ | |||||
| Avedick B. Poladian | ☐ | ☐ | ☐ | ||||||
| Robert M. Shearer | ☐ | ☐ | ☐ | ||||||
| The Board of Directors recommends a vote | For | Against | Abstain | ||||
| Advisory Vote to Approve Named Executive Officer Compensation | |||||||
| ☐ | ☐ | ☐ | |||||
| 3. | Ratification of Selection of KPMG as Occidental's Independent Auditor | ☐ | ☐ | ☐ | |||
| The Board of Directors recommends a vote | For | Against | Abstain | ||||
| Shareholder Proposal Requesting Occidental Set and Disclose Quantitative Short-, Medium- and Long-Term GHG Emissions Reduction Targets Consistent with the | ☐ | ☐ | ☐ | ||||
| THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED AS DIRECTED ABOVE. WHERE NO INSTRUCTION IS GIVEN, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE DIRECTION OF THE PROGRAM'S RETIREMENT COMMITTEE. | ||||||||||
THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION CARD WILL BE VOTED AS DIRECTED ABOVE. WHERE NO INSTRUCTION IS GIVEN, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE DIRECTION OF THE PROGRAM'S RETIREMENT COMMITTEE.
Please sign exactly as your name(s) appear(s) on Proxy.the card. If the shares are held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include their title and authority. Corporations should provide the full name of the corporation and the title of the authorized officer signing the Proxy.card.
| | |||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and 2022 Proxy Statement and 2021 Annual Report are available at www.proxyvote.com.
OCCIDENTAL PETROLEUM CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Friday, May 6, 2022 at 9:00 a.m. Central Time
www.virtualshareholdermeeting.com/OXY2022
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| voting instruction card | ||
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TO THE TRUSTEE OF THE RETIREMENT SAVINGS PROGRAM
FOR EMPLOYEES OF OXY VINYLS CANADA CO. (THE "PROGRAM"):
I acknowledge receipt of the Notice of Annual Meeting of Shareholders of Occidental Petroleum Corporation ("Occidental") to be held on May 6, 2022, and the Proxy Statement furnished in connection with the solicitation of proxies by Occidental's Board of Directors. You are directed to vote the shares which are held for my account pursuant to the Program in the manner indicated on the reverse side of this card and, in your discretion, on all other matters which may properly come before such meeting and at any adjournment or postponement thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting of Shareholders by a reasonable time before the proxy solicitation was made).
My vote for the election of directors is indicated on the reverse side. Nominees are: Vicky A. Bailey, Stephen I. Chazen, Andrew Gould, Carlos M. Gutierrez, Vicki Hollub, William R. Klesse, Jack B. Moore, Avedick B. Poladian and Robert M. Shearer. In the event any of the foregoing nominees are unavailable for election or unable to serve, shares represented by this card may be voted for a substitute nominee selected by the Board of Directors.
I understand that in the event I do not return this card, or it is not received by May 3, 2022, any shares held for my account in the Program will be voted by you in accordance with the direction of the Program's Retirement Committee.
Continued and to be signed on reverse side