Occidental Petroleum Chairman: "They say they're the 99%. But 99% of what I'm not sure."
by David Atkins
Today I had the privilege of being a shareholder proxy (together with fellow bloggers Dante Atkins, RL Miller and Karoli) at Occidental Petroleum's shareholder meeting today at a lavish Santa Monica hotel, together with a group of other activists organized on behalf of the 99%. New rules put in place by Dodd-Frank require companies to hold votes on executive compensation. Though the votes are non-binding, they've been having a surprisingly positive, chilling effect on outrageous compensation packages. The objective during the meeting was to ask questions about the company's social and environmental responsibility policies and its executive compensation. For background, here's some information on Occidental (OXY) from a dossier provided by the organizers:
OXY made billions in US profits and got billions in federal tax subsidies. From 2008 to 2011, OXY earned $15.8 billion in US profits and received over $3.1 billion in federal tax subsidies. In 2009, OXY earned $2.1 billion in US profits and received a $3.8 million tax refund – a tax rate of negative 0.2%.
In 2011, OXY made $4.7 billion in US profit and got a $1.3 billion tax subsidy.
Former CEO Ray Irani’s compensation peaked at $76.1 million in 2010, up 142% from the year before, bringing his total to more than $800 million since 2000. He was the second highest-paid CEO in the US in 2010, according to CNN Money. Assuming a 40-hour work week, Irani’s $76.1 million earnings that year break down to: $36,000/hour; $292,000/day; $1.5 million/week. To put this in perspective, the median annual worker’s salary of $34,000 equals:
$16/hour, $130/day, $650/week. At this rate, it would take 2,249 years to match Irani’s 2010 compensation.
In 2010, the company held its first ever advisory vote on compensation after CALSTRS and Relational Investors of San Diego increased scrutiny over the size of OXY’s compensation packages and lack of management succession.
Even though Irani’s exorbitant compensation was widely rebuked, the voluntary “Say-on-Pay” proposal required by the Dodd-Frank Act was voted down, 54% to 46%.
Yes, it's that bad.
There were no cameras or even cell phones allowed in the meeting, but organizer after organizer stepped up to ask uncomfortable questions of Mr. Irani and the newly elected board. The answers given were total bullshit as one might expect: Mr. Irani claimed that Occidental paid a 42% effective tax rate, for instance. No follow-up was allowed.
A new set of directors was elected, among whom included former Michigan Senator Spencer Abraham, and George W. Bush Commerce Secretary Gutierrez. It was the second time I've had the displeasure of being in the same room with Mr. Gutierrez; the previous time I was in Washington D.C. during his tenure as Commerce Secretary, explaining to the assembled audience of rich executives that he saw his principal role as Commerce Secretary to distribute government funds "more usefully" into their hands where it would "be more productive."
Eventually the organizers began a mic check in which we participated, saying among other things:
Can the board please answer why you continue to drill away our California Dreams, and why Ray Irani makes $50 million dollars when we as shareholders are driving on pothole ridden streets and our children's teachers are being laid off. There is no budget crisis, but a crisis of your social conscience. WE ARE THE 99%."
Most of the activists were then escorted from the room, with amused twitters from the various ghouls in dresses and pinstripe suits. Some of us stayed, however, to witness the aftermath (including a couple of very expensively produced media presentations on the increased drilling of "assets" by Occidental, as well as the company's increasing dividends and shareholder returns--backed by the most jarring and out-of-place scoring of the Polovetsian Dances in my memory.) Immediately after most of the activists were escorted out, Mr. Irani said the following:
"90% of the shareholders of Oxy have approved this compensation package. This sort of thing has been happening at other board meeting around the country. These people, they say they're the 99%. But 99% of what, I'm not sure."
Assets. That's all these people respect, and it's all they care about. For people like Mr. Irani, people without assets are barely even people. When we call ourselves the 99%, he's not even sure what the 99% is of, since people can't be counted in petrodollars.
Shaming will never work with these people. They just don't care, and they've long since lost whatever faint connection they may have had to the real human experience. The interventionist force of law is the only thing any of them will respect. They certainly don't respect our humanity.
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