Occidental is governed by a
Board of Directors (Board), which, among other duties, sets the company's policies, objectives and overall direction of the business and monitors and evaluates the senior management team. At Occidental's 2016 Annual Meeting, Occidental's stockholders elected eleven directors to the Board, nine of whom are independent directors meeting the independence criteria set forth in the New York Stock Exchange Listed Company Manual.
The Board of Directors is committed to strong corporate governance policies and practices and continually reviews evolving best practices in governance and seeks input from Occidental's stockholders. Occidental's corporate governance highlights include:
an independent Chairman of the Board;
annual elections of the entire Board;
majority voting for directors and, in uncontested elections, mandatory resignation if a majority vote is not received;
stockholders right to proxy access, the ability to act by written consent and to call special meetings;
no poison pill or similar plan; and,
a confidential voting policy.
The Board has a
Chairman, selected from among the independent directors, who is responsible for scheduling and setting the agenda for the Board meetings and acts as a liaison between the Board and the Chief Executive Officer as well as between the Board and stockholders. The Board has four standing committees:
Audit Committee is made up of financially literate, independent directors. The Committee is responsible for hiring the independent auditors to audit Occidental's consolidated financial statements, books, records and accounts, discussing the company's financial accounting, reporting principles and internal controls with auditors and management, and overseeing the compliance program for the Code of Business Conduct.
Corporate Governance, Nominating and Social Responsibility Committee is responsible for recommending candidates for election to the Board and the periodic review of Occidental's Corporate Governance policies and consideration of other governance issues. This committee oversees the evaluation of the Board and management, reviews social responsibility policies, programs and practices, and oversees compliance with the Human Rights Policy.
Environmental, Health and Safety Committee members review the HES performance of Occidental's operations, the results of internal compliance reviews and progress on remediation projects.
The Board's independent
Executive Compensation Committee determines the compensation for the President and CEO and also sets compensation for Occidental's executive officers. A strong emphasis on performance-based compensation is intended to encourage and reward actions that maximize value creation for stockholders over the long-term. Occidental's Proxy Statement contains additional information on executive compensation.
Each independent director receives compensation in the form of an annual retainer and common stock awards – the latter to ensure that the directors' interests are aligned with those of the stockholders. Occidental does not provide option awards, non-equity incentive awards or retirement plans for independent directors.
Nominees for director must meet several criteria in order to be considered for a seat on the Board. In addition, to be considered independent, a director must satisfy the independence criteria of the New York Stock Exchange Listed Company Manual. Qualities considered include business experience, character, diversity and specialized knowledge or expertise that would be beneficial to the Board and Occidental.
The Conflict of Interest Policy requires directors, officers and employees to avoid activities or business interests that could be construed as divergent from, or in competition with, Occidental's interests or the individuals' responsibilities at Occidental. Directors and executive officers must annually disclose any transactions between themselves or their immediate family members and the company. Related party transactions required to be reported under the rules of the Securities and Exchange Commission are reported in Occidental's Proxy Statement.
The performance of individual directors, committees and the full Board is evaluated annually. The annual assessment focuses on such factors as whether committees are functioning effectively and whether the Board has the necessary diversity of skills, backgrounds and experience to meet the company's current and future needs.
Stockholders, employees and others who wish to communicate with a director or a committee may do so by sending a letter or fax to his or her attention in care of Occidental's Corporate Secretary at the Houston headquarters. In addition, the Proxy Statement for the Annual Meeting of Stockholders contains information on avenues available to stockholders who wish to submit proposals or introduce items of business at the Annual Meeting, or nominate individuals to serve on the Board.