Oil and gas company Occidental Petroleum (OXY) issued a statement that denied any “fight at the top” between Chairman Ray Irani and current CEO Stephen Chazen, nearly two months after announcing a search for a new chief executive.
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Irani is set to retire from his post at the end of next year, while Chazen will remain CEO until a replacement is found. The board said it disclosed the succession planning since Chazen is expected to be named as a nominee for the board.
A search for Chazen’s replacement was announced on Feb. 14 as a result of disappointing stock performance and “execution inefficiencies” that sent operating and capital costs higher, according to the statement released by Occidental’s board of directors.
Occidental’s board insisted the executive search was initiated as a result of underwhelming performance in 2012. The statement seemed to directly address a report by The Wall Street Journal, quoting the headline of an article that said Irani and directors who support him were pushing for Chazen’s dismissal.
“In regard to recent press articles and inaccurate speculation, the independent directors reiterate that there is no ‘fight at the top,’ ” the board said in its statement.
A source familiar with the situation told the Journal on Monday that “the tension is still there” between Chazen and Irani.
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Chazen said in the statement that he is not leaving Occidental under his own will, although he will continue to work with the board until a successor is found.
“Ray and I continue to meet to discuss issues, and work well together on the Company’s business and strategies, as we have done over the past 19 years,” Chazen said.
The Journal also reported that some shareholders have discussed voting against the re-election of board members on May 3 as a protest against the plan to replace Chazen.
One Occidental investor wrote a letter to the board of directors last week to support Chazen as CEO and call for Irani’s retirement.
“This is the wrong time to transition to a new CEO. We believe that Oxy has in place an effective and respected CEO who should be empowered to manage an orderly transition in the future,” Steven Romick of First Pacific Advisors said, adding that the reported infighting “reflects poorly” on Occidental.
However, Deutsche Bank analyst Paul Sankey explained in a research note to clients that it could be difficult for shareholders to stop the succession plan, despite Chazen’s popularity among investors.
Occidental shares were down 64 cents at $81.21 in late afternoon trading.