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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 Party other than the Registrant      

CHECK THE APPROPRIATE BOX:
  Preliminary Proxy Statement
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
  Definitive Additional Materials
Soliciting Material Under Rule 14a-12

Occidental Petroleum Corporation

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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MESSAGE FROM THE

      

BOARD OF DIRECTORS

                                           
                    

Dear Shareholders,

We cordially invite you to attend Occidental’s 2020 Annual Meeting of Shareholders. The meeting will be held via live webcast on Friday, May 29, 2020 at 9:00 a.m. Central Time. A meeting agenda and details follow, as well as voting instructions. You will be able to participate in the 2020 Annual Meeting online at www.virtualshareholdermeeting.com/OXY2020 and may submit questions and vote your shares electronically (other than shares held through our employee benefit plans, which must be voted prior to the meeting). The attached Notice of the 2020 Annual Meeting of Shareholders and Proxy Statement provide details on how to join the meeting and the business we plan to conduct.

OVERVIEW

With the acquisition of Anadarko Petroleum Corporation (Anadarko) in August 2019, the Board believes that Occidental has the talent, assets and capabilities to lead our industry in unprecedented ways. To ensure that we realize the potential of the acquisition, the Board established an Integration Committee to guide progress and advise senior management throughout the integration phase. We made rapid progress in meeting our acquisition-related goals in 2019. Within five months of closing, we made significant headway toward achieving our $15 billion divestiture commitment, outperformed expectations by capturing 60% of our annual synergy target on a run-rate basis, and repaid approximately one-third of the new debt raised for the acquisition. The integration efforts and progress completed by Occidental in the last half of 2019 prepared our organization to better address the environment we face today.

Toward the end of 2019 and into 2020, the global economy began to weaken, and with the COVID-19 pandemic, oil demand decreased. Crude oil prices fell dramatically as the Organization of the Petroleum Exporting Countries and its broader partners (OPEC+) were unable to agree on necessary production cuts to balance worldwide oil supply with demand. As oil supply continued to grow despite falling demand, a production cut was necessary to maintain prices, but that cut had not occurred, and prices plummeted. On April 12, 2020, members of OPEC+ agreed to certain production cuts; however, these cuts are not expected to be enough to offset near-term demand loss attributable to the COVID-19 pandemic.

While the sudden and significant decline in global commodity prices presents new challenges, we are taking actions to strengthen Occidental’s balance sheet and reduce debt. On March 10, 2020, the Board made the difficult decision to reduce Occidental’s quarterly dividend to $0.11 per share, effective July 2020. On March 25, 2020, the company announced a reduced 2020 capital budget of between $2.7 billion and $2.9 billion, down from $5.2 billion to $5.4 billion, a midpoint reduction of 47%. As we continue to reset our business plan in light of new market realities, the Board and senior management are identifying and implementing additional cost reductions. These actions are intended to lower Occidental’s cash flow breakeven level, positioning Occidental to succeed in a low commodity price environment. We believe these decisions, along with the work we did in 2019, will create a much stronger company as we manage Occidental through the current situation and beyond. Applying our operational excellence to our best-in-class assets will enable us to return value to our shareholders.

COMPENSATION DECISIONS

In the wake of these events and cost-cutting initiatives, the Executive Compensation Committee (the Compensation Committee) remains fully committed to Occidental’s pay-for-performance philosophy. With the unanimous support of the Board, the Compensation Committee approved the following commitments for 2020 executive compensation:

The Compensation Committee will not adjust the long-term incentive awards granted in February 2020. Awards were granted as part of our regular annual award cycle in February 2020, before the fall of crude oil prices, and the Compensation Committee subjected a meaningful portion of the awards to performance conditions intended to be more difficult to achieve than past programs. As a result, the awards have lost significant value in the last month, currently tracking at less than 8% of their original grant date fair values. The Compensation Committee has determined that it will not adjust the number of shares granted or the relevant performance targets as a result of our current macroeconomic climate. As of March 24, 2020:

the time-based restricted stock unit (RSU) awards had decreased in value by over 74%, in line with Occidental’s stock price decline;
the cash return on capital employed (CROCE) awards were tracking at a 0% payout level, based on current commodity prices and Occidental’s reduced capital budget;

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Message from the Board of Directors

the relative total shareholder return (TSR) awards were tracking at a 0% payout level, based on Occidental’s current TSR performance against the performance of the peer group; and
the stock option and stock appreciation right awards were significantly underwater.

The Compensation Committee significantly reduced the base salaries of the company’s executive officers. Due to cash conservation priorities, the Compensation Committee retracted planned 2020 salary increases and reduced Ms. Hollub’s base salary by 81%. The base salary of the other named executive officers was reduced by an average of 64%.

The Compensation Committee will continue to preserve strong alignment with shareholders in all aspects of the executive compensation program. As described in the Compensation Discussion and Analysis section of this Proxy Statement, in February 2020, the Compensation Committee awarded over 70% of Ms. Hollub’s earned 2019 annual cash incentive award in shares of forfeitable time-vesting RSUs in lieu of cash so that her ultimate annual incentive pay opportunity remained subject to Occidental’s stock price performance through early 2023. As of March 24, 2020, these RSUs had decreased in value by over 74%. The Compensation Committee will continue to monitor market conditions and Occidental’s performance and may take additional compensation actions as appropriate.

The Board voluntarily reduced its own compensation. The Board meaningfully reduced all components of non-employee director compensation by 15% for the 2020-2021 term. For the 2019-2020 term, all remaining payments were also reduced by 15%.

BOARD REFRESHMENT

Following the retirement of two directors at the 2019 Annual Meeting, we appointed three new independent directors who bring fresh perspectives to the boardroom. Robert Shearer, a former managing director of BlackRock Advisors LLC, joined the Board in July 2019; Andrew Gould, former Chief Executive Officer of Schlumberger and former non-Executive Chairman of the BG Group, joined the Board on March 1, 2020; and Stephen I. Chazen, the President, Chief Executive Officer and Chairman of Magnolia Oil & Gas Corporation and former President and Chief Executive Officer of Occidental, joined the Board as Independent Chairman on March 18, 2020. Messrs. Shearer, Gould and Chazen are accomplished professionals who bring valuable experience and expertise to our Board. In February, Spencer Abraham and Eugene Batchelder notified the Board that they would not seek re-election and would retire at the 2020 Annual Meeting. In addition, on March 25, 2020, Occidental entered into the Director Appointment and Nomination Agreement (the Agreement) with Carl C. Icahn and certain affiliated persons (the Icahn Group), and the other parties thereto as described under “Director Nominations” beginning on page 17, pursuant to which we agreed, among other matters, to appoint Andrew Langham, General Counsel of Icahn Enterprises LP, Nicholas Graziano, a portfolio manager for Icahn Capital LP, and Margarita Paláu-Hernández, Chief Executive Officer of Hernandez Ventures LLC, to the Board, effective immediately, and to nominate them for election to the Board at the 2020 Annual Meeting. Entering into the Agreement has enabled the Board to fully commit its attention to navigating Occidental through the current difficult macro environment, which will benefit Occidental’s shareholders. In connection with the Agreement, current Board members Margaret M. Foran and Elisse B. Walter will retire from the Board effective at the 2020 Annual Meeting. We thank Messrs. Abraham and Batchelder and Mses. Foran and Walter for their many contributions to the Board and years of dedicated service.

GOVERNANCE-ENHANCING CHARTER AND BY-LAW AMENDMENTS

The Board continues to proactively evaluate and act on shareholder feedback regarding Occidental’s corporate governance profile. On March 25, 2020, the Board adopted amendments (the March By-law Amendments) to Occidental’s amended and restated by-laws (the By-laws), that, among other things, (i) facilitate shareholders’ ability to call special meetings and to remove and replace directors and fill vacancies on the Board at shareholder-requested special meetings or by written consent, (ii) align the information required to be provided by a shareholder nominating a director for election at a special meeting to be consistent with the information required to be provided by a shareholder nominating a director for election at an annual meeting, (iii) provide that shareholders, in addition to the Board, are entitled to fix the size of the Board from time to time by a resolution duly adopted at a shareholder meeting or by written consent and (iv) implement a uniform advance notice period for all business to be brought before an annual meeting by shareholders, which reduces the advance notice shareholder proponents must provide for nominations of directors at annual meetings, and approved corresponding changes to the Board’s Nominating Policy. Effective upon the entry into the Agreement, the March By-law Amendments took effect and the Icahn Group withdrew certain proposed by-law amendments it had previously submitted to Occidental for adoption by shareholders at the 2020 Annual Meeting (the Icahn By-law Amendments).

The Board is also proposing for shareholders’ approval amendments to Occidental’s restated certificate of incorporation, as amended (the Charter), to, among other things, facilitate shareholders’ ability to act by written consent (see Proposal 7) and call special meetings (see Proposal 8).

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Message from the Board of Directors

RIGHTS AGREEMENT

On March 12, 2020, the Board adopted a limited duration stockholder rights plan (the Rights Agreement) and declared a dividend of one Right (as defined in this Proxy Statement) for each outstanding share of Occidental common stock to shareholders of record at the close of business on March 23, 2020. Adopting the Rights Agreement is designed to allow all shareholders of Occidental to realize the long-term value of their investment by reducing the likelihood that any person or group would gain control of Occidental through open market accumulation or other coercive takeover tactics without appropriately compensating Occidental’s shareholders for such control or providing the Board sufficient time to make informed judgments. The Rights Agreement is intended to protect Occidental and its shareholders from efforts to capitalize on recent market volatility and macroeconomic conditions to obtain control of Occidental on terms that the Board may determine are not in the best interests of Occidental and its shareholders.

The Rights Agreement provides that the Rights will expire at the close of business on the day following the certification of the voting results of the 2020 Annual Meeting, or any adjournment thereof, if a proposal to approve the Rights Agreement is not approved by Occidental’s shareholders. Accordingly, the Board is seeking the approval of Proposal 9 to approve the Rights Agreement, which will have the effect of extending the expiration of the Rights in accordance with the terms of the Rights Agreement to March 11, 2021. The Rights may expire at an earlier date if redeemed or exchanged by Occidental or upon the occurrence of certain transactions.

SHARE YOUR VIEWS

As always, we value your views and encourage you to share your opinions with us. 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.

Sincerely,

ON BEHALF OF YOUR BOARD,


Stephen I. Chazen Jack B. Moore Vicki Hollub
Independent Chairman of the Board Vice Chairman of the Board President and Chief Executive Officer

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NOTICE OF ANNUAL MEETING

      

OF SHAREHOLDERS

                                           
                    

You are cordially invited to attend Occidental’s 2020 Annual Meeting of Shareholders, to be held at 9:00 a.m. Central Time on Friday, May 29, 2020, via live webcast at www.virtualshareholdermeeting.com/OXY2020.

Items of Business. At the meeting, our shareholders will be asked to act on the following matters and consider any other matters as may properly come before the meeting:

1. Election of eleven directors
2. Approve, on an advisory basis, named executive officer compensation
3. Ratify the selection of KPMG as Occidental’s independent auditor
4. Approve Occidental’s Amended and Restated 2015 Long-Term Incentive Plan
5. Approve the issuance of common stock underlying the Berkshire Hathaway warrant
6. Approve an increase in authorized shares of common stock
7. Adopt amendments to the Charter to enhance shareholders’ ability to act by written consent
8. Adopt amendments to the Charter to lower the ownership threshold for shareholders to call special meetings and make other clarifying amendments
9. Approve the Rights Agreement

Occidental began furnishing proxy materials to shareholders on or about April 17, 2020.

Record Date. Each shareholder of record as of the close of business on April 3, 2020 (the record date) is entitled to receive notice of, attend and vote at the meeting.

Notice and Attendance. A Notice of Internet Availability or proxy card is being mailed beginning on or about April 17, 2020 to each shareholder of record as of the record date. In light of current information and guidance about the COVID-19 pandemic, to protect the health and well-being of our shareholders and employees, we have decided to hold the 2020 Annual Meeting solely by means of virtual communications. Please retain 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 as you will need this number in order to virtually attend the 2020 Annual Meeting should you elect to participate by visiting www.virtualshareholdermeeting.com/OXY2020. We intend to return to hosting in-person annual meetings in 2021. Please see “Admission to the Annual Meeting” on page 99 for additional information.

Your vote is extremely important. Regardless of whether or not you plan to attend the 2020 Annual Meeting, we encourage you to vote by following the Internet instructions provided in the Notice of Internet Availability. If you received a paper copy of the proxy materials or a voting instruction form, you may also vote by telephone or by marking, signing and returning the proxy card or voting instruction form in the postage-paid envelope provided. This will ensure that your shares are represented and will save Occidental additional expenses of soliciting proxies.

If you have any questions or require any assistance in voting your shares, please contact MacKenzie Partners, Occidental’s proxy solicitor who is assisting us in connection with the meeting, toll-free at (800) 322-2885 or at (212) 929-5500 or by email at OXY@mackenziepartners.com.

By Order of the Board,




Nicole E. Clark
Vice President, Deputy General Counsel and
Corporate Secretary

April 17, 2020


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TABLE OF CONTENTS  
        

Message from the Board of Directors       1
Notice of Annual Meeting of Shareholders 5
Proxy Statement Summary 7
Questions and Answers about the Annual Meeting and Voting 13
 Election of Directors 17
Director Nominations 17
About the Director Nominees 18
Summary of the Board’s Director Nominee Core Competencies and Composition Highlights 24
Corporate Governance 25
Corporate Governance Highlights 25
Shareholder Engagement 26
Sustainability and Social Responsibility 26
Board Evaluation Process 27
Director Selection and Recruitment 27
Board of Directors and its Committees 28
Other Governance Matters 30
Communications with Directors 31
 Advisory Vote to Approve Named Executive Officer Compensation 32
Compensation Discussion and Analysis 33
Executive Summary 33
Objectives of the Executive Compensation Program 36
Governance Features of the Executive Compensation Program 36
Overview of the 2019 Executive Compensation Program 37
Compensation Program Emphasizes Performance 38
Executive Compensation Program Considerations 38
Elements of the 2019 Compensation Program 40
Changes to Long-Term Incentive Award Mix for 2020 47
Other Compensation and Benefits 48
Individual Compensation Considerations 49
Additional Compensation Policies and Practices 54
Risk Assessment of Compensation Policies and Practices 55
Compensation Committee Report 55
Executive Compensation Tables 56
Summary Compensation 56
Grants of Plan-Based Awards 57
Outstanding Equity Awards 58
Stock Vested in 2019 60
Nonqualified Deferred Compensation 60
Potential Payments upon Termination or Change in Control 61
Pay Ratio 64
Non-Employee Director Compensation 65
Director Compensation Program 65
Director Compensation Table 66
Security Ownership 67
Certain Beneficial Owners and Management 67
 Ratification of Selection of KPMG as Occidental’s Independent Auditor 69
Audit Related Matters 69
Ratification of Selection of Independent Auditor 69
Report of the Audit Committee 70
 Approval of Occidental’s Amended and Restated 2015 Long-Term Incentive Plan 71
Summary of the Amended LTIP 74
Certain Federal Income Tax Consequences 78
 Approval of Issuance of Common Stock Underlying the Berkshire Hathaway Warrant 83
Overview of the Proposal 83
Board of Directors’ Recommendation 84
Description of the Investment Agreements 84
Required Shareholder Vote under NYSE Listed Company Manual 88
 Approval of Increase in Authorized Shares of Common Stock 89
 Adoption of Amendments to the Charter to Enhance Shareholders’ Ability to Act by Written Consent 91
 Adoption of Amendments to the Charter to Lower the Ownership Threshold for Shareholders to Call Special Meetings and Make Other Clarifying Amendments 93
 Approval of the Rights Agreement 95
Overview of the Proposal 95
Board of Directors’ Recommendation 95
Overall Effect of the Rights Agreement 96
Description of the Rights Agreement 96
General Information 99
Information Available Online 99
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 29, 2020 99
Admission to the Annual Meeting 99
Voting Instructions and Information 100
Shareholder Proposals for the 2021 Annual Meeting 101
Director Nominations for the 2021 Annual Meeting 102
Forward-Looking Statements 103
 Amended and Restated 2015 Long-Term Incentive Plan 104
 Written Consent Amendment 121
 Special Meeting Amendments 125
 Rights Agreement 126
 Reconciliations to GAAP 163

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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 2019 performance, please review Occidental’s Annual Report on Form 10-K for the year ended December 31, 2019 (the Annual Report).

Agenda Items and Voting Recommendations

How to Vote Your Shares

You can vote using any of the following methods:

Internet
Online using your smartphone or computer at www.proxyvote.com

     

Call
By telephone call to the toll-free number listed on your proxy card or voting instruction form

     

Mail
Completing, signing and returning your proxy card or voting instruction form in the postage-paid envelope provided

     

Virtual Meeting
If you plan to participate in the 2020 Annual Meeting via the live webcast, you may vote online during the meeting using your smartphone or computer


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Proxy Statement Summary

Director Nominees and Composition Highlights

The Board seeks to achieve a diverse and broadly inclusive membership. Our Board’s director nominees bring varying perspectives to the boardroom by virtue of their diverse backgrounds and experiences, qualifications, skills, genders, ethnicities and tenures on the Board. To better convey the well-roundedness of our Board’s director nominees, we have included a skills matrix on page 24 that identifies the core competencies of each of our Board’s director nominees that contributed to his or her nomination to the Board.

Independence       Tenure       Diversity

Occidental’s governance policies require that independent directors comprise at least two thirds of the members of the Board (a policy that exceeds New York Stock Exchange (NYSE) requirements). The Board has determined that each of our Board’s director nominees, other than Ms. Hollub, is independent.

The average tenure of our Board’s director nominees is 4.1 years, which we believe reflects a balance of company experience and new perspectives.

The Board is committed to achieving a diverse and broadly inclusive membership. Three of our Board’s director nominees are diverse, based on gender and ethnicity.


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Proxy Statement Summary

Corporate Governance Highlights

RELATING TO THE BOARD       RELATING TO SHAREHOLDER RIGHTS
Independent 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
Board committees comprised entirely of independent directors
Director retirement age policy of 75
Meaningful director stock ownership guidelines (6x annual cash retainer)
Annual evaluations of the Board, each committee and individual directors
Ability of shareholders to call a special meeting at a 15% threshold, subject to shareholder approval of Proposal 8
Ability of shareholders to propose an action by written consent at a 15% threshold, subject to shareholder approval of Proposal 7
Shareholder right to proxy access (3% for 3 years, up to 20% of the Board)
Confidential Voting Policy
Nominating Policy to consider properly submitted shareholder-recommended director nominees
No supermajority voting requirements
Active director participation in and oversight of the shareholder engagement program
 

2019 Business Performance Highlights

Overview

Occidental’s principal businesses consist of three segments: oil and gas, marketing and midstream, and chemical. The oil and gas segment’s core U.S. onshore operations are in the Permian Basin of west Texas and southeast New Mexico, where we are the leading producer and largest acreage holder, and in the DJ Basin in Colorado and the Uinta Basin of Utah. Internationally, we are regarded as a premier partner in Oman and the United Arab Emirates in the Middle East, and Colombia in Latin America. Occidental is also the fourth-largest producer in the deepwater Gulf of Mexico, where we are among the largest leaseholders. Within the marketing and midstream segment, our Oxy Low Carbon Ventures (OLCV) business unit is dedicated to advancing low-carbon technologies to grow Occidental’s business while reducing emissions.

Anadarko Acquisition Amplified our Industry Leadership

With the acquisition of Anadarko in August 2019, we enhanced our portfolio of world-class assets.

 
#1 #1 #1 #4 Top 3
producer in Permian, DJ and Uinta Basins in Carbon Dioxide Enhanced Oil Recovery Projects independent producer in Oman producer in the Gulf of Mexico In production of polyvinyl chloride (PVC), chlorine, and caustic soda

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Proxy Statement Summary

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 33.

Strategic
Completed the acquisition of Anadarko, which enhanced Occidental’s Permian leadership position and bolstered our portfolio of free cash flow generating assets.
Made significant headway toward meeting our $15 billion divestiture goal.
Executed agreements with Western Midstream Partners, LP (WES) that establish WES as an independent midstream company capable of successfully competing for third-party business.
Progressed the work of Oxy Low Carbon Ventures (OLCV) with continued focus on projects aimed at reducing our carbon footprint.
Financial
Executed an oil-hedging program to manage near-term exposure to cash flow variability from commodity price risks.
Repaid $7 billion of debt in less than five months after closing the Anadarko acquisition with asset sale proceeds and excess free cash flow.
Returned approximately $2.5 billion to common shareholders through dividends in 2019.
Operational
Delivered 32 of the best 100 wells in the Delaware Basin on a six-month cumulative-oil basis, while using significantly less proppant than competitors.
Increased worldwide production volumes from ongoing operations by 150% to an average of 996 thousand barrels of oil equivalent (BOE) per day.
Safety & Environmental
Continued to emphasize safety in the workplace, as Occidental achieved its best safety record of all-time.
Dedicated resources to advancing carbon capture, utilization and storage (CCUS) projects for anthropogenic (man-made) carbon dioxide.
Increased water-recycling capacity in the Permian Basin to minimize freshwater usage.
Sustainability
Announced multiple OLCV projects, including investments to advance innovative low-carbon technology and engineering the world’s largest direct air capture and sequestration plant.
Released our second climate report, which provides detailed information regarding Occidental’s approach to managing climate-related risks and opportunities in the framework endorsed by the Task Force on Climate-related Financial Disclosures.
Achieved start-up of a solar facility directly powering an enhanced oil recovery operation in the Permian Basin, which is expected to reduce the cost and carbon intensity of those operations.
Integration
Captured 60% of a $2 billion annual synergy target on a run-rate basis, including $799 million of overhead synergies, $83 million of operating synergies, and $323 million of capital synergies.
Integrated the combined workforce under a shared mission, vision and set of values.

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Proxy Statement Summary

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,” which consists of base salary, an annual cash incentive award and long-term incentive awards. Direct compensation is heavily weighted toward long-term incentive awards. In 2019, long-term incentive awards conditioned on Occidental’s three-year TSR and CROCE performance accounted for 53% of Ms. Hollub’s target direct compensation, and Ms. Hollub’s time-vesting RSU award accounted for 22% of Ms. Hollub’s target direct compensation.

Allocation of Direct Compensation Elements in 2019(1)

A substantial majority of named executive officer compensation is dependent on performance.

90% of Ms. Hollub’s (and an average of 85% of the other named executive officers’) 2019 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) Target direct compensation is composed of 2019 base salary, target annual cash incentive award opportunity, and the grant date fair value of 2019 long-term incentive awards.

Realizable Pay Aligns with Performance

To demonstrate the alignment of executive pay with Occidental’s performance and the experience of our shareholders, the table below shows the Target Direct Compensation awarded to Ms. Hollub in each of 2018, 2019 and 2020 as compared to the realizable value of that compensation as of March 24, 2020. Realizable pay includes (i) base salary, (ii) actual annual cash incentive award amounts paid for the performance year (excluding 2020, which is shown at target), and (iii) the projected value of long-term incentive awards granted each year and accrued dividends based on performance to date and our stock price as of March 24, 2020. The table illustrates that realizable pay is significantly impacted by Occidental’s performance and ultimate pay opportunities are strongly aligned with the interests of our shareholders.

CEO Target Direct Compensation and Realizable Pay


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Proxy Statement Summary

Highlights of Executive Compensation Program Policies and Practices

The 2019 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.

What We Do
Pay for Performance. A substantial majority of named executive officer compensation is performance-based. The Compensation Committee reviews the metrics underlying the long-term incentive program and annual cash incentive 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 2019 decisions to (i) increase the sustainability component of the annual cash incentive award and (ii) align short-term compensation with the achievement of acquisition-related goals.
Clawback in the Event of Misconduct. The Compensation Committee has the authority to claw back annual cash incentive awards and long-term incentive awards for violations of Occidental’s Code of Business Conduct and related policies.
Emphasize Stock Ownership. Long-term incentive awards are payable solely 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 executives) are subject to meaningful stock ownership guidelines, ranging from three to six times the officer’s annual base salary.
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 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.

What We Don’t Do
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).
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 common stock or transact in derivatives of Occidental’s common stock.
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 senior executive which exceed 2.99 times his or her salary plus annual cash incentive award without shareholder approval.
No Repricing of Stock Options. The 2015 LTIP does not permit the repricing of stock options or stock appreciation rights without shareholder approval.

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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 April 3, 2020, the record date, which entitles you to notice of, and to vote at, Occidental’s 2020 Annual Meeting to be held on May 29, 2020, 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 year ended December 31, 2019. The proxy materials also include the proxy card for the 2020 Annual Meeting. The proxy materials contain detailed information about the matters to be voted on at the 2020 Annual Meeting and provide updated information about Occidental to assist you in making an informed decision when voting your shares. While the Board does not expect a contested solicitation, in the event of a solicitation in opposition to any voting recommendation of the Board, the Board will solicit proxies using a WHITE proxy card.

Occidental began furnishing the proxy materials to shareholders on or about April 17, 2020 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 April 3, 2020, the record date, are entitled to vote at the 2020 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 900,018,184 shares of our common stock outstanding and entitled to vote. There are no other voting securities of Occidental entitled to vote at the 2020 Annual Meeting outstanding. A complete list of shareholders entitled to vote at the 2020 Annual Meeting will be open to the examination of any shareholder during normal business hours for 10 days prior to the 2020 Annual Meeting at Occidental’s headquarters and during the 2020 Annual Meeting at www.virtualshareholdermeeting.com/OXY2020, 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.

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Questions and Answers about the Annual Meeting and Voting

Voting at the Meeting. The 2020 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 2020 Annual Meeting by visiting www.virtualshareholdermeeting.com/OXY2020. You will be able to vote your shares electronically during the 2020 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. 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 Savings Plan, Anadarko Employee Savings 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 2020 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. Except as otherwise required by law, shares held in the Anadarko Employee Savings Plan that are not voted or for which the trustee does not receive timely voting instructions will not be voted by the trustee.

5. CAN I REVOKE MY PROXY OR CHANGE MY VOTE?

Yes. You may revoke your proxy or change your vote before the 2020 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 2020 Annual Meeting 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 2020 Annual Meeting:

“FOR” the election of all director nominees (Proposal 1);
“FOR” Proposals 2 through 9; and
in the discretion of the persons named as proxies on all other matters that may properly come before the 2020 Annual Meeting or any adjournment or postponement thereof.

7. HOW CAN I ATTEND THE 2020 ANNUAL MEETING?

In light of current information and guidance about the COVID-19 pandemic, to protect the health and well-being of our shareholders and employees, we have decided to hold the 2020 Annual Meeting solely by means of virtual communications. We intend to return to hosting in-person annual meetings in 2021.

You may participate in the 2020 Annual Meeting only if you were a shareholder as of April 3, 2020, the record date, or if you hold a valid proxy. You will be able to participate in the 2020 Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/OXY2020. You also will be able to vote your shares electronically during the 2020 Annual Meeting (other than shares held through our employee benefit plans, which must be voted prior to the meeting).

To participate in the 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.

The 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.

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Questions and Answers about the Annual Meeting and Voting

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.

9. WHAT CONSTITUTES A QUORUM AT THE 2020 ANNUAL MEETING?

A majority of all outstanding shares entitled to vote at the 2020 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, 4, 5 and 9 require the affirmative vote of a majority of the shares present in person or by proxy at the 2020 Annual Meeting and entitled to vote on the subject matter. You may vote “FOR” or “AGAINST” or “ABSTAIN” from voting for each of these proposals. Abstentions will have the same effect as votes cast “AGAINST” each such proposal and broker non-votes have no effect on the vote.

Proposals 6, 7 and 8 require the affirmative vote of a majority of the shares of our common stock outstanding and entitled to vote. You may vote “FOR” or “AGAINST” or “ABSTAIN” from voting for each of these proposals. Abstentions and broker non-votes will have the same effect as votes cast “AGAINST” each such proposal.

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 recommended to be adopted by the Board.

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 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., ratification of the selection of independent public accountants) but not on non-routine matters (e.g., election 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, including Proposals 6, 7 and 8, all of which contemplate different amendments to the Charter.

If shareholder approval is not obtained for Proposal 5, Occidental will still be permitted to issue up to approximately 1.76 million shares of its common stock upon exercise of the Warrant described in Proposal 5 and, commencing on the 30th day following the 2020 Annual Meeting, Berkshire Hathaway Inc. (Berkshire Hathaway) will have the right to sell the Warrant to Occidental (in whole or in part) for an amount in cash equal to the option value of the Warrant (or any portion thereof that Berkshire Hathaway elects to sell), taking into account the intrinsic and time value thereof, based on certain specified assumptions. Additional consequences of the failure to obtain shareholder approval for Proposal 5 are described in the section of this Proxy Statement entitled “Proposal 5: Approval of Issuance of Common Stock Underlying the Berkshire Hathaway Warrant – Board of Directors’ Recommendation” on page 84.

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Questions and Answers about the Annual Meeting and Voting

13. WHAT IS THE RIGHTS AGREEMENT AND WHY AM I BEING ASKED TO APPROVE IT?

On March 12, 2020, the Board adopted the Rights Agreement and declared a dividend of one Right for each outstanding share of Occidental common stock to shareholders of record at the close of business on March 23, 2020. Adopting the Rights Agreement is designed to allow all stockholders of Occidental to realize the long-term value of their investment by reducing the likelihood that any person or group would gain control of Occidental through open market accumulation or other coercive takeover tactics without appropriately compensating Occidental’s shareholders for such control or providing the Board sufficient time to make informed judgments. The Rights Agreement is intended to protect Occidental and its stockholders from efforts to capitalize on recent market volatility and macroeconomic conditions to obtain control of Occidental on terms that the Board determined are not in the best interests of Occidental and its shareholders.

The Rights may cause substantial dilution to any person or group that attempts to acquire Occidental without the approval of the Board. As a result, the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or discourage a merger, tender or exchange offer or other business combination involving Occidental that is not approved by the Board.

The Rights Agreement provides that the Rights will expire at the close of business on the day following the certification of the voting results of the 2020 Annual Meeting, or any adjournment thereof, if a proposal to approve the Rights Agreement is not approved by Occidental’s shareholders at such annual meeting or adjournment thereof. Accordingly, the Board is seeking the approval of Proposal 9 to approve the Rights Agreement, which will have the effect of extending the Rights Agreement until the expiration of the Rights in accordance with the terms of the Rights Agreement to March 11, 2021. The Rights may expire at an earlier date if redeemed or exchanged by Occidental or upon the occurrence of certain transactions.

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 Mackenzie Partners, Occidental’s proxy solicitor who is assisting us in connection with the 2020 Annual Meeting, toll-free at (800) 322-2885 or at (212) 929-5500 or by email at OXY@mackenziepartners.com.

16     Occidental Petroleum Corporation


Table of Contents

    Proposal 1                                                       
                             
    Election
of Directors
   
                                           
    The Board of Directors recommends a vote “FOR” each of the director nominees.    
   
                                                                          

Director Nominations

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, including the successful integration of Anadarko. In recommending candidates for election to the Board, the Corporate Governance and Nominating Committee (the Governance Committee) evaluates a candidate’s character; judgment; skill set and experience in light of Occidental’s 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-election 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 shareholders’ meeting (if applicable); and the well-roundedness of the Board as a whole.

On March 25, 2020, Occidental entered into the Agreement with the Icahn Group and, solely with respect to the provisions applicable to herself, as the New Independent Director, Margarita Paláu-Hernández, pursuant to which Occidental (i) increased the size of the Board to fifteen directors and (ii) appointed Nicholas Graziano, Andrew N. Langham and Margarita Paláu-Hernández to the Board to fill the resulting vacancies, with such appointments effective immediately. Under the Agreement, in addition to Spencer Abraham and Eugene L. Batchelder who notified the Board of their intention to retire in February 2020, Margaret M. Foran and Elisse B. Walter will not stand for re-election at the 2020 Annual Meeting and accordingly will retire from the Board at the 2020 Annual Meeting and the size of the Board will be reduced to 11 directors effective at the opening of the polls at the 2020 Annual Meeting. The Board thanks them for their years of service to Occidental.

Mr. Graziano was appointed to the Advisory Committee, a new committee formed on March 26, 2020, and the Audit Committee; Mr. Langham was appointed to the Advisory Committee and the Governance Committee; and Ms. Paláu-Hernández was appointed to the Compensation Committee and the Environmental, Health and Safety Committee. The foregoing description of the Agreement is qualified in its entirety by the full text of the Agreement, a copy of which is attached as Exhibit 10.1 to Occidental’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the SEC) on March 25, 2020.

In 2020, the Governance Committee recommended to the Board, and the Board approved, the nomination of the eleven persons whose biographies appear below to serve for a one-year term ending at the 2021 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.

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 of the Board’s nominees would be unable or unwilling to serve as a director if elected. However, should any of our Board’s nominees be unable or unwilling to stand for election at the time of the 2020 Annual Meeting, proxies may be voted for a substitute nominee selected by the Board, or the Board 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.

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Table of Contents

Proposal 1: Election of Directors

About the Director Nominees

All of the nominees are currently directors of Occidental who were elected by shareholders at the 2019 Annual Meeting, except for Mr. Shearer, who was appointed to the Board in July 2019, Mr. Gould, who was appointed to the Board in January 2020 (effective March 2020), Mr. Chazen, who was appointed to the Board as Independent Chairman on March 18, 2020, and Messrs. Graziano and Langham and Ms. Paláu-Hernández, each of whom was appointed to the Board on March 25, 2020 in accordance with the Agreement. In the event any nominee should be unavailable for election or unable to serve at the time of the meeting, the proxies may be voted for a substitute nominee selected by the Board, or the Board may reduce the number of directors to eliminate the vacancy.

Biographical information with respect to each of our Board’s director nominees, together with a list of the core competencies that contributed to the conclusion that such person should serve as a director, is presented below. An overview of the core competencies of each of our Board’s director nominees is featured in a skills matrix on page 24.


                                                                                           
   
   

Stephen I. Chazen   INDEPENDENT
Chairman since 2020
Age: 73
Director Since: 2020
Board Committees: Advisory

Current Public Company Directorships:
Magnolia Oil & Gas Corporation The Williams Companies, Inc.
Former Public Company Directorships (within the last 5 years):
Ecolab Inc.
  
 
   
DIRECTOR QUALIFICATIONS
Mr. Chazen is the President, Chief Executive Officer and Chairman of Magnolia Oil & Gas Corporation, a publicly-traded exploration and production company. Prior to that, Mr. Chazen was President and Chief Executive Officer of Occidental from May 2011 to April 2016 and served as a member of the Board from May 2010 to May 2017. Mr. Chazen served as Occidental’s President and Chief Operating Officer from 2010 to 2011; President and Chief Financial Officer from 2007 to 2010; Chief Financial Officer and Senior Executive Vice President from 2004 to 2007; Chief Financial Officer and Executive Vice President-Corporate Development from 1999 to 2004; and Executive Vice President-Corporate Development from 1994 to 1999. Before joining Occidental, Mr. Chazen was Managing Director in Corporate Finance and Mergers and Acquisitions at Merrill Lynch. He worked as Director of Project Evaluation and Reservoir Engineering at Columbia Gas Development Corporation from 1977 to 1982. He began his career with Northrop Corporation in 1973 as a Laboratory Manager at the Johnson Space Center. Mr. Chazen is a former Chairman of the Board of the American Petroleum Institute and the Catalina Island Conservancy. Mr. Chazen holds a Ph.D. in Geology from Michigan State University, a master’s degree in Finance from the University of Houston, and a bachelor’s degree in Geology from Rutgers College.
 
CORE COMPETENCIES

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Proposal 1: Election of Directors

                                                                                           
   
   

Andrew Gould   INDEPENDENT

Age: 73
Director Since: 2020
Board Committees: Advisory; Audit; Governance; Sustainability

Former Public Company Directorships (within the last 5 years):
BG Group
Saudi Aramco
  
 
   
DIRECTOR QUALIFICATIONS
Mr. Gould is the former Chairman and Chief Executive Officer of Schlumberger Limited (Schlumberger), a leading oilfield services company, and served in that capacity from 2003 to 2011. Mr. Gould began his career at Schlumberger in 1975 in its Internal Audit department, based in Paris. In addition to his career at Schlumberger, Mr. Gould served as non-Executive Chairman of BG Group, a multinational oil and gas company, from 2012 until its sale to Royal Dutch Shell in 2016 and served as interim Executive Chairman in 2014. Mr. Gould served on the United Kingdom Prime Minister’s Council for Science and Technology from 2004 to 2007. He was Vice-Chairman Technology for the United States National Petroleum Councils’ 2007 report “Facing the Hard Truths about Energy” and was awarded the Charles F. Rand Memorial Gold Medal by the Society of Petroleum Engineers in 2014. He is currently a partner of CSL Capital Management, a private equity firm that specializes in energy services, and Chairman of Kayrros Advisory Board, an advanced data analytics company. Mr. Gould serves as a member of the Board of Directors of BJ Services, a private oilfield services company. Mr. Gould also serves as the Chairman of the International Advisory Board at Boston Consulting Group Center for Energy Impact and is a member of the Board of Trustees of The King Abdullah University of Science and Technology in Jeddah, Saudi Arabia. Mr. Gould has an undergraduate degree in Economic History from Cardiff University and qualified as a Chartered Accountant with the Institute of Chartered Accountants in England and Wales.
 
CORE COMPETENCIES
 
                                                                                           
       
   

Nicholas Graziano   INDEPENDENT
 
Age: 47
Director Since: 2020
Board Committees: Advisory; Audit

Current Public Company Directorships:
Cloudera, Inc.
Herbalife Nutrition Ltd.
Herc Holdings Inc.
Xerox Corporation
Former Public Company Directorships (within the last 5 years):
Conduent Incorporated
  
 
   
DIRECTOR QUALIFICATIONS
Mr. Graziano is a director selected by the Icahn Group pursuant to the Agreement. Mr. Graziano has served as Portfolio Manager of Icahn Capital, the entity through which Carl C. Icahn manages investment funds, since February 2018. Mr. Graziano was previously the Founding Partner and Chief Investment Officer of the hedge fund Venetus Partners LP, where he was responsible for portfolio and risk management, along with day-to-day firm management, from June 2015 to August 2017. Prior to founding Venetus, Mr. Graziano was a Partner and Senior Managing Director at the hedge fund Corvex Management LP from December 2010 to March 2015. At Corvex, Mr. Graziano played a key role in investment management and analysis, hiring and training of analysts and risk management. Prior to Corvex, Mr. Graziano was a Portfolio Manager at the hedge fund Omega Advisors, Inc., where he managed a proprietary equity portfolio and made investment recommendations, from September 2009 until December 2010. Before Omega, Mr. Graziano served as a Managing Director and Head of Special Situations Equity at the hedge fund Sandell Asset Management, where he helped build and lead the special situations team responsible for managing a portfolio of concentrated equity and activist investments, from July 2006 to July 2009. Mr. Graziano has over 15 years of experience investing in the energy sector and in particular, E&P. Mr. Graziano previously served on the Board of Directors of each of Conduent Incorporated from May 2018 to March 2020; Fair Isaac Corporation (FICO) from February 2008 to May 2013; WCI Communities Inc. from August 2007 to August 2009; and InfoSpace Inc. from May 2007 to October 2008. Carl C. Icahn has a non-controlling interest in Conduent Incorporated through the ownership of securities. Sandell Asset Management had non-controlling interests in FICO and InfoSpace through the ownership of securities. Mr. Graziano completed a five-year undergraduate/MBA program at Duke University, earning both a BA in Economics and an MBA degree from The Fuqua School of Business.
 
CORE COMPETENCIES
 
2020 Proxy Statement      19
 

Table of Contents

Proposal 1: Election of Directors

                                                                                           
   
   

Carlos M. Gutierrez  INDEPENDENT

Age: 66
Director Since: 2009
Board Committees: Governance (Chair); Audit; Sustainability

Current Public Company Directorships:
MetLife, Inc.
Former Public Company Directorships (within the last 5 years):
Time Warner Inc.
  
 
   
DIRECTOR QUALIFICATIONS
Secretary Gutierrez is Co-Chair of Albright Stonebridge Group, a commercial diplomacy and strategic advisory firm. Prior to joining Albright Stonebridge in April 2013, Secretary Gutierrez was Vice Chairman of the Institutional Clients Group and a member of the Senior Strategic Advisory Group at Citigroup Inc. from 2011 to February 2013. He joined Citigroup from communications and public affairs consulting firm APCO Worldwide Inc., where he was Chairman of the Global Political Strategies division in 2010. He served as U.S. Secretary of Commerce from February 2005 to January 2009, where he worked with foreign government and business leaders to advance economic relationships and enhance trade. Prior to his government service, Secretary Gutierrez was with Kellogg Company, a global manufacturer and marketer of well-known food brands, for nearly 30 years. After assignments in Latin America, Canada, Asia, and the United States, he became President and Chief Executive Officer in 1999 and Chairman of the Board in 2000, positions he held until 2005. Secretary Gutierrez currently serves as an external director on the U.S. Board of PwC, a private professional services firm, and Viridis Technologies, a private technology company. He is Chairman of the National Foreign Trade Council and a member of the Human Freedom Advisory Council at the George W. Bush Institute, the Bo’ao Forum for Asia and the U.S.-India Business Council. He is also a co-founder of The Dream.US, a scholarship fund for undocumented students.
 
CORE COMPETENCIES

                                                                                           
   
   

Vicki Hollub     

President and Chief Executive Officer

Age: 60
Director Since: 2015

Current Public Company Directorships:
Lockheed Martin
  
 
   
DIRECTOR QUALIFICATIONS
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 has held a variety of management and technical positions with responsibilities on three continents, including roles in the United States, Russia, Venezuela and Ecuador. Most recently, she served as Occidental’s President and Chief Operating Officer, overseeing the company’s oil and gas, chemical and midstream operations. Ms. Hollub previously was Senior Executive Vice President, Occidental Petroleum, and President, Oxy Oil and Gas, where she was responsible for operations in the U.S., the Middle East region and Latin America. Prior to that, she held a variety of leadership positions, including Executive Vice President, Occidental, and President, Oxy Oil and Gas, Americas; Vice President, Occidental, and Executive Vice President, U.S. Operations, Oxy Oil and Gas; Executive Vice President, California Operations; and President and General Manager of the company’s Permian Basin operations. Ms. Hollub started her career at Cities Service, which was acquired by Occidental. Ms. Hollub serves on the boards of the American Petroleum Institute, Khalifa University for Science and Technology in Abu Dhabi and Lockheed Martin. She is the chair of the U.S. Secretary of Energy Advisory Board, the U.S. chair for the U.S.-Colombia Business Council and a member of the World Economic Forum, where she serves on the stewardship board for the Platform for Shaping the Future of Energy and Materials, and the Oil and Gas Climate Initiative. A graduate of the University of Alabama, Ms. Hollub holds a Bachelor of Science in Mineral Engineering. She was inducted into the University of Alabama College of Engineering 2016 class of Distinguished Engineering Fellows.
 
CORE COMPETENCIES

20     Occidental Petroleum Corporation


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Proposal 1: Election of Directors

                                                                                           
   
   

William R. Klesse    INDEPENDENT

Age: 73
Director Since: 2013
Board Committees: Compensation; Environmental, Health and Safety; Integration

Current Public Company Directorships:
MEG Energy
Former Public Company Directorships (within the last 5 years):
Valero Energy Corporation
  
 
   
DIRECTOR QUALIFICATIONS
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, Christus Santa Rosa Foundation and on the board of a private company. 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.
 
CORE COMPETENCIES

                                                                                           
   
   

Andrew N. Langham    INDEPENDENT

Age: 46
Director Since: 2020
Board Committees: Advisory; Governance

Current Public Company Directorships:
Cheniere Energy, Inc.
Welbilt, Inc.
CVR Partners LP
Former Public Company Directorships (within the last 5 years):
CVR Energy, Inc.
CVR Refining, LP
Freeport-McMoRan Inc.
Newell Brands Inc.
  
 
   
DIRECTOR QUALIFICATIONS
Mr. Langham is a director selected by the Icahn Group pursuant to the Agreement. Mr. Langham has served as General Counsel of Icahn Enterprises LP (a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, real estate and home fashion) since 2014. From 2005 to 2014, Mr. Langham was Assistant General Counsel of Icahn Enterprises. Prior to joining Icahn Enterprises, Mr. Langham was an associate at Latham & Watkins LLP focusing on corporate finance, mergers and acquisitions, and general corporate matters. Mr. Langham was previously a director of CVR Energy, Inc., a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries, from 2014 to 2017; CVR Refining, LP, an independent downstream energy limited partnership, from 2014 to 2019; Freeport-McMoRan Inc., the world’s largest publicly traded copper producer, from 2015 to 2018; and Newell Brands Inc., a global marketer of consumer and commercial products, in 2018. Mr. Langham received a B.A. from Whitman College and a J.D. from the University of Washington.
 
CORE COMPETENCIES

2020 Proxy Statement      21


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Proposal 1: Election of Directors

                                                                                           
   
   

Jack B. Moore     INDEPENDENT

Vice Chairman since 2019
Age: 66
Director Since: 2016
Board Committees: Compensation (Chair); Advisory; Environmental, Health and Safety; Integration

Current Public Company Directorships:
KBR Inc.
ProPetro Holding Corp.
Former Public Company Directorships (within the last 5 years):
Cameron International Corporation
Rowan Companies plc
  
 
   
DIRECTOR QUALIFICATIONS
Mr. Moore most recently served as President and Chief Executive Officer of Cameron International Corporation from April 2008 to October 2015 and served as Chairman of the Board of Cameron from May 2011 until it was acquired by Schlumberger in 2016. Mr. Moore served as Cameron’s President and Chief Operating Officer from January 2007 to April 2008. Mr. Moore joined Cameron in 1999 and, prior to that, held various management positions at Baker Hughes, where he was employed for over 20 years. Mr. Moore currently serves on the University of Houston System Board of Regents and actively serves in leadership positions with the American Heart Association and Memorial Assistance Ministries. Mr. Moore is a graduate of the University of Houston with a B.B.A. degree and attended the Advanced Management Program at Harvard Business School.
 
CORE COMPETENCIES

                                                                                           
   
   

Margarita Paláu-Hernández    INDEPENDENT

Age: 63
Director Since: 2020
Board Committees: Environmental, Health and Safety; Compensation

Current Public Company Directorships:
Conduent Incorporated
Herbalife Nutrition Ltd.
Former Public Company Directorships (within the last 5 years):
ALJ Regional Holdings, Inc.
  
 
   
DIRECTOR QUALIFICATIONS
Ms. Paláu-Hernández is a director selected pursuant to the Agreement with the Icahn Group. Ms. Paláu-Hernández is the founder and Chief Executive Officer of Hernández Ventures, a private firm engaged in the acquisition and management of a variety of business interests in the United States and Mexico. Prior to founding Hernández Ventures in November 1988, Ms. Paláu-Hernández was an attorney from September 1985 until August 1988 with the law firm of McCutcheon, Black, Verleger & Shea, where she focused on domestic and international business and real estate transactions. Ms. Paláu-Hernández was previously a director of ALJ Regional Holdings, Inc., a holding company focused on acquiring and operating customer service-based businesses, from 2015 to 2019. In September 2018, Ms. Paláu-Hernández was nominated by President Donald Trump to serve as United States Representative to the Seventy-third Session of the General Assembly of the United Nations. Ms. Paláu-Hernández is also a member of the following non-profit organizations and boards: Pacific Counsel on International Policy, since April 2017; Co-Chair of the Yale School of Management Council of Global Advisors, since March 2016; Ex-Officio member of the Yale School of Management Board of Advisors, since March 2016; Smithsonian National Latino Board, since August 2016 (Vice-Chair since 2019); UCLA School of Law Board of Advisors, since October 2008; UCLA Law Women L.E.A.D. since September 2016; and Trustee Emeritus of the University of San Diego Board of Trustees, since December 2017. Ms. Paláu-Hernández also served on the University of San Diego Board of Trustees from September 2007 until July 2016. Ms. Paláu-Hernández has a B.A. from the University of San Diego and a J.D. from UCLA School of Law.
 
CORE COMPETENCIES

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Proposal 1: Election of Directors

                                                                                           
   
   

Avedick B. Poladian  INDEPENDENT

Age: 68
Director Since: 2008
Board Committees: Audit (Chair); Integration (Chair); Governance

Current Public Company Directorships:
California Resources Corporation
Public Storage
Western Asset Management Company Funds
  
 
   
DIRECTOR QUALIFICATIONS
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. During his tenure as Chief Operating Officer, Mr. Poladian oversaw human resources, risk management, construction, finance and legal functions across the firm. Mr. Poladian was with Arthur Andersen from 1974 to 2002, admitted to Partner in 1984, Managing Partner, Pacific Southwest in 1989, and is a certified public accountant (inactive). He is a past member of the Young Presidents Organization, the California Society of CPAs and the American Institute of CPAs. Mr. Poladian was appointed to the California State Board of Accountancy and served in the position for nine years. He is a Director Emeritus of the YMCA of Metropolitan Los Angeles, a member of the Board of Advisors of the Ronald Reagan UCLA Medical Center and a former Trustee of Loyola Marymount University. Mr. Poladian holds a bachelor’s degree in Accounting from Loyola Marymount University.
 
CORE COMPETENCIES

   
   
   

Robert M. Shearer     INDEPENDENT

Age: 64
Director Since: 2019
Board Committees: Compensation; Governance; Sustainability

 

 

  
 
   
DIRECTOR QUALIFICATIONS
Mr. Shearer retired in 2017 as a managing director of BlackRock Advisors, LLC, where he also served as co-head of BlackRock’s Equity Dividend team and was a member of the Fundamental Equity Platform within BlackRock’s Portfolio Management Group. Mr. Shearer was also the portfolio manager for both the BlackRock Equity Dividend Fund and Natural Resources Trust, which grew from $500 million to over $50 billion under his leadership. Prior to that, Mr. Shearer managed the Merrill Lynch World Natural Resources Portfolio for Merrill Lynch Investment Managers, which merged with BlackRock in 2006. Mr. Shearer has also held senior leadership roles at David L. Babson & Company, Concert Capital Management and Fiduciary Trust Company International. As a senior research officer for Citicorp Investment Management, he focused on the oil industry, including exploration and production, pipelines and oilfield services. Mr. Shearer holds an undergraduate degree in Economics from the University of Wisconsin, as well as a Master of International Management from the Thunderbird School of Global Management and a Master of Business Administration from the University of Wisconsin. He is a Chartered Financial Analyst.
 
CORE COMPETENCIES

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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.


Independence Tenure Diversity

Occidental’s governance policies require that independent directors comprise at least two thirds of the members of the Board (a policy that exceeds New York Stock Exchange (NYSE) requirements). The Board has determined that each of our Board’s director nominees, other than Ms. Hollub, is independent.

The average tenure of our Board’s director nominees is 4.1 years, which we believe reflects a balance of company experience and new perspectives.

The Board is committed to achieving a diverse and broadly inclusive membership. Three of our Board’s director nominees are diverse, based on gender and ethnicity.


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CORPORATE GOVERNANCE

                        
                      

The Board’s Corporate Governance Policies establish Occidental’s governance framework. The Corporate Governance Policies address the structure and operation of the Board, including matters related to director independence; retirement; outside board memberships; the role of the Board’s Independent Chairman; director stock ownership; and Board and Committee performance evaluations. In addition to the Corporate Governance Policies, the Board has established other stand-alone governance policies, including a policy on shareholder rights plans, a confidential voting policy and an independent compensation consultant policy. Occidental’s governance policies are reviewed and updated periodically, in light of changing regulations, evolving best practices and shareholder feedback. The Corporate Governance Policies and other governance policies are available on our website at www.oxy.com/investors/Governance.

Occidental’s corporate governance practices generally align with the Investor Stewardship Group’s Corporate Governance Framework for U.S. Listed Companies.

Corporate Governance Highlights

RELATING TO THE BOARD       RELATING TO SHAREHOLDER RIGHTS
Independent 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
Board committees comprised entirely of independent directors
Director retirement age policy of 75
Meaningful director stock ownership guidelines (6x annual cash retainer)
Annual evaluations of the Board, each committee and individual directors
Ability of shareholders to call a special meeting at a 15% threshold, subject to shareholder approval of Proposal 8
Ability of shareholders to propose an action by written consent at a 15% threshold, subject to shareholder approval of Proposal 7
Shareholder right to proxy access (3% for 3 years, up to 20% of the Board)
Confidential Voting Policy
Nominating Policy to consider properly submitted shareholder-recommended director nominees
No supermajority voting requirements
Active director participation in and oversight of the shareholder engagement program

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Corporate Governance

Shareholder Engagement

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 shares outstanding 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 various shareholder engagements throughout the year.

     

In 2019 we engaged with shareholders representing over

65%
of our outstanding shares

      How we engaged with our shareholders
      We annually reach out to our largest 30-50 shareholders to discuss agenda items for the annual meeting and any other topics of interest.
We attended 13 investor conferences and executed 8 non-deal roadshows.
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.
We formed the Sustainability and Shareholder Engagement Committee to oversee our shareholder engagement program, emphasizing our commitment to ongoing communication with our shareholders and other stakeholders.
        

Responding to Feedback. Engagements in recent years have resulted in enhancements to Occidental’s practices and disclosures regarding environmental matters, including the content of Occidental’s climate reports; matters related to corporate governance, including the adoption of proxy access, the March By-law Amendments and the Board’s proposed amendments to the Charter to, among other things, facilitate shareholders’ ability to act by written consent (see Proposal 7) and call special meetings (see Proposal 8); and the executive compensation program, including the design of the long-term incentive program.

Sustainability and Social Responsibility

Occidental’s sustainability and social responsibility programs support the company’s business objectives and are intended to positively affect the communities where we operate, our employees and the environment. By investing in programs and initiatives that manage operational impacts and address key stakeholder concerns, Occidental strengthens its community relationships and creates shared value for stakeholders and our business. Occidental categorizes its social responsibility commitments and ongoing initiatives into five pillars:

governance and transparency,
workforce development,
health and safety,
environmental stewardship; and
economic and social development.

Reporting on Performance. Occidental’s climate report, CDP Climate Report, CDP Water Report and an Annual Performance Summary Table with information regarding its environmental, health, safety and social performance are available for download on Occidental’s website.

Board Oversight. At the Board level, the Sustainability and Shareholder Engagement Committee oversees 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. It also oversees Occidental’s external reporting on environmental, social and governance and sustainability matters, including climate-related risks and opportunities.

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Corporate Governance

Board Evaluation Process

Led by the Governance Committee, the Board conducts a robust annual evaluation of its performance and the performance of each of the Board’s committees and the individual directors. The Governance Committee believes that board evaluations are a critical tool in assessing the composition and effectiveness of the Board, its committees and its directors, and presents an opportunity to identify areas of strength and areas capable of improvement. The annual Board evaluation includes an assessment of, among other things, whether the Board and its Committees have the necessary diversity of skills, backgrounds and experiences to meet Occidental’s needs. The Governance Committee annually considers the format of its evaluation processes, which, in recent years, have intentionally included different formats, such as anonymous questionnaires, individual director interviews, and the use of a third-party facilitator. The 2019 Board evaluation process is summarized below.

Director Selection and Recruitment

Pursuant to the Board’s Nominating Policy, the Governance Committee considers director candidates recommended by shareholders as discussed further on page 102. In recent years, the Board has identified director candidates through the use of independent search firms, third-party recommendations, and the recommendations of directors and executive officers. For a discussion of the factors that the Governance Committee considers in recommending candidates for election to the Board, see “Proposal 1: Election of Directors – Director Nominations” on page 17.

Proxy Access for Shareholder-Nominated Director Candidates

Occidental’s By-laws permit a group of up to 20 shareholders, collectively 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 director nominees constituting up to 20% of the Board, but not less than two directors, provided that the shareholder(s) and the nominee(s) meet the requirements of Occidental’s By-laws. For more information on proxy access and other procedures to recommend candidates to the Board, see “Director Nominations for the 2021 Annual Meeting” beginning on page 102.


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Corporate Governance

Board of Directors and its Committees

Occidental is governed by its Board, which is led by an Independent Chairman, and its seven committees, composed entirely of independent directors. The structure of the Board and the responsibilities of its committees are described in more detail below.

Independent Board Leadership Structure

Occidental’s By-laws provide for the Board to annually elect one of its independent directors to be Chairman of the Board. On March 18, 2020, the Board elected Mr. Chazen to serve in that position, succeeding Mr. Batchelder, who held the role since 2015. The Chairman of the Board presides at Board meetings and meetings of shareholders and his/ 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 Compensation Committee and the other independent directors, the performance of the Chief Executive Officer;
Consult with other Board members as to recommendations on the membership and chairpersons of the Board committees and discuss recommendations with the Governance Committee;
Communicate the views of the independent directors and the Board committees with respect to objectives set for management by the Board; and
Serve as a liaison between the Board and Occidental’s shareholders.
 

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 of the Board in the absence or disability of the Chairman. In 2019, the Board elected Mr. Moore to serve as Vice Chairman.

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.

Audit Committee     
           
 

MEMBERS

Avedick B. Poladian (Chair) 
Margaret M. Foran
Andrew Gould
Nicholas Graziano
Carlos M. Gutierrez
Elisse B. Walter

MEETINGS IN 2019: 8

The Audit Committee members are independent and the Board has determined that each Audit Committee member is an “audit committee financial expert” within the meaning of the SEC’s regulations.

The Audit Committee Report with respect to Occidental’s financial statements is on page 70.

PRIMARY RESPONSIBILITIES:

Engage and evaluate the independent auditor
Discuss the scope and results of the audit with the independent auditor and matters required to be discussed by the PCAOB
Oversee financial reporting and accounting principles and controls and the internal audit function
Review internal audit reports and responsive actions by management
Review matters relating to financial risk
Evaluate the independent auditor’s qualifications, performance and independence
Oversee matters relating to Occidental’s Code of Business Conduct
 
 
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Corporate Governance

Corporate Governance and Nominating Committee     
           
 

MEMBERS

Carlos M. Gutierrez (Chair)
Eugene L. Batchelder
Margaret M. Foran
Andrew Gould
Andrew N. Langham
Avedick B. Poladian
Robert M. Shearer

MEETINGS IN 2019: 5

It is the policy of the Governance Committee to consider nominees to the Board recommended by Occidental’s shareholders. See page 102 for information regarding how to recommend nominees to the Board.

PRIMARY RESPONSIBILITIES:

Recommend candidates for election to the Board
Review and interpret Occidental’s Corporate Governance Policies and consider other governance issues
Review and approve related party transactions
Oversee the evaluation of the Board, its committees and the individual directors
Evaluate and make recommendations to the Board regarding the compensation and benefits of non-employee directors
 

Environmental, Health and Safety Committee     
           
 

MEMBERS

Elisse B. Walter (Chair)
Spencer Abraham
William R. Klesse
Jack B. Moore
Margarita Paláu-Hernández

MEETINGS IN 2019: 5

PRIMARY RESPONSIBILITIES:

Review and discuss with management the status of environmental, health and safety issues, including compliance with applicable laws and regulations
Review and discuss the results of internal compliance reviews and remediation projects
Review and discuss with management Occidental’s environmental, health and safety performance and related initiatives
 

Executive Compensation Committee     
           
 

MEMBERS

Jack B. Moore (Chair)
Spencer Abraham
William R. Klesse
Margarita Paláu-Hernández
Robert M. Shearer

MEETINGS IN 2019: 6

The Compensation Committee’s report on executive compensation is on page 55.

PRIMARY RESPONSIBILITIES:

Review the performance of the CEO and determine CEO compensation based on this evaluation
Review and approve the compensation of all other executive officers
Review Occidental’s talent development processes and programs
Oversee the assessment of risks related to Occidental’s compensation policies and programs
Administer Occidental’s equity-based incentive compensation plans and periodically review the performance of the plans
 

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Corporate Governance

Integration Committee     
           
 

MEMBERS

Avedick B. Poladian (Chair)
Spencer Abraham
William R. Klesse
Jack B. Moore

MEETINGS IN 2019: 1

PRIMARY RESPONSIBILITIES:

Oversee and assess the effectiveness of management’s integration of the business, operations and organizational culture of Anadarko
Oversee management’s implementation of Board-approved asset sales, capital reduction plans and other de-leveraging strategies related to the integration and monitor management’s achievement of targeted synergies
 

Sustainability and Shareholder Engagement Committee     
           
 

MEMBERS

Margaret M. Foran (Chair)
Andrew Gould
Carlos M. Gutierrez
Robert M. Shearer
Elisse B. Walter

MEETINGS IN 2019: 1

PRIMARY RESPONSIBILITIES:

Review and oversee Occidental’s social responsibility programs and external reporting on environmental, social and governance and sustainability matters, including climate-related risks and opportunities
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
 

Advisory Committee     
           
 

MEMBERS

Stephen I. Chazen (Chair)
Andrew Gould
Nicholas Graziano
Andrew N. Langham
Jack B. Moore

PRIMARY RESPONSIBILITIES:

Meet with Occidental’s management more frequently than the full Board and therefore provide more regular Board oversight and input to Occidental’s management with respect to Occidental’s business and operations
Provide regular updates to the Board regarding the committee’s activities
 

Other Governance Matters

Director Education

Directors are provided with continuing education, including business-specific learning opportunities through site visits and briefing sessions led by internal experts or third parties on topics that are relevant to Occidental. Directors are also encouraged to attend additional continuing education programs designed to enhance the performance and competencies of individual directors and the Board. In 2019, directors participated in various corporate director and compliance programs held by universities and corporate director, governance and investor organizations, as attendees or as presenters.

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Corporate Governance

Director Attendance

The Board of Directors held eleven meetings in 2019, one of which was principally devoted to a strategic review session. Each of the directors attended more than 75% of the aggregate number of meetings of the Board and of the Board committees on which he or she served and which were held during the period that each director served. All of the directors then serving on the Board attended the 2019 Annual Meeting of Shareholders. Attendance at the Annual Meeting of Shareholders is expected of directors as if it were a regular meeting of the 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 five executive sessions in 2019. The Board’s then-Independent Chairman, Mr. Batchelder, chaired the executive sessions.

Risk Oversight

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 Board’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 may be required or desirable. Every committee, other than the newly-formed Advisory, Integration and Sustainability and Shareholder Engagement Committees, met at least five times in 2019. 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 well as to make recommendations of appropriate changes or improvements.

Related Party Transactions

Pursuant to Occidental’s Conflict of Interest Policy and Code of Business Conduct, each director and executive officer has an obligation to avoid any activity, agreement, business investment or interest, or other situation that could be construed either as divergent from or in competition with Occidental’s interest or as an interference with such person’s primary duty to serve Occidental, unless prior written approval has been granted by the Audit Committee. All potential conflicts of interest must be reported to a designated compliance officer. A summary of the Conflict of Interest Policy is included in Occidental’s Code of Business Conduct which can be found at www.oxy.com/Investors/Governance.

Pursuant to Occidental’s written policy on related party transactions, the Governance Committee reviews relationships and transactions in which Occidental and its directors, executive officers, or their immediate family members participate if the amount involved exceeds $120,000. To help identify related party transactions, each director and executive officer must complete an annual questionnaire that requires disclosure of any transaction between Occidental and the director or executive officer or any of his or her affiliates or immediate family members. Additionally, the accounting department reviews Occidental’s financial records for payments made to, or received from, related parties and the entities with which the related parties are affiliated, and reports any identified transactions to the legal department. The Governance Committee reviews and approves, ratifies or rejects identified related party transactions. In approving, ratifying or rejecting a related party transaction, the Governance Committee considers such information as it deems appropriate to determine whether the transaction is on reasonable and competitive terms and is fair to Occidental and its shareholders.

Pursuant to the policy, the Governance Committee identified one transaction that qualified as a related party transaction. Brent Vangolen, the son of Mr. Glenn Vangolen, an executive officer, is employed by Occidental as a manager of surface and base management technology for the domestic oil and gas segment. His total compensation for 2019 (consisting of his annual base salary, annual bonus and stock-based compensation) was approximately $260,000. 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 evaluations or compensation decisions regarding his son. Mr. Brent Vangolen’s compensation and benefits are comparable with similarly situated employees of Occidental.

Communications with Directors

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 forward correspondence unopened.

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    Proposal 2                                                       
                             
    Advisory Vote to Approve Named Executive Officer Compensation    
                                           
    The Board recommends that you vote “FOR” the advisory vote to approve named executive officer compensation.    
   
                                                                          

Occidental is submitting this proposal to its shareholders 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, the shareholders approved, on an advisory basis, a frequency of every year for casting advisory votes to approve named executive officer compensation. The next Say-on-Pay vote is expected to occur at our 2021 Annual Meeting of Shareholders.

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 33 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:

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; 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 2019, 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 present in person or by proxy at the 2020 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.

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COMPENSATION DISCUSSION

      

AND ANALYSIS

                                                                     
                    

This Compensation Discussion and Analysis (CD&A) describes the material elements, objectives and principles of Occidental’s 2019 executive compensation program for its named executive officers, recent compensation decisions and the factors the Compensation Committee considered in making those decisions. The named executive officers for 2019 were:

Name            Position
Vicki Hollub President and Chief Executive Officer
Edward A. Lowe Executive Vice President and Group Chairman, Middle East
Marcia E. Backus Senior Vice President, General Counsel and Chief Compliance Officer
Oscar K. Brown Senior Vice President, Strategy, Business Development and Supply Chain
Cedric W. Burgher Senior Vice President and Chief Financial Officer

Executive Summary

2019 Performance and Pay Decisions

With the acquisition of Anadarko in August 2019, Occidental became the fourth largest producer in the Gulf of Mexico and the leading producer in the DJ and Uinta Basins and solidified its leadership position in the Permian Basin. Internationally, Occidental remains a partner of choice in Colombia, Oman and the United Arab Emirates.

Following the acquisition, Occidental made rapid progress toward meeting its value capture, deleveraging and divestiture commitments. Within five months, Occidental repaid one-third of the new debt it raised in connection with the acquisition and captured nearly 60% of its $2 billion annual synergy target on a run-rate basis. These accomplishments included $799 million of overhead synergies, $83 million of operating synergies and $323 million of capital synergies. Occidental prioritized safety while making significant progress in integrating its businesses and achieving its acquisition-related goals. In 2019, Occidental also delivered its best-ever safety performance, with a combined employee and contractor illness and incidence rate of 0.29.

Occidental worked quickly to apply its technical and operational expertise to Anadarko’s asset base lowering the capital intensity of its operations to produce more oil at a lower cost. In the Delaware Basin, for example, Occidental has already realized a meaningful reduction in drilling days, per-well completion savings and a reduction in downtime on its legacy Anadarko acreage. These efficiencies are expected to increase cost savings and free cash flow over time to create long-term value for Occidental’s shareholders.

Effect of the Anadarko Acquisition on 2019 Compensation. In February 2019, the Compensation Committee reviewed and set the performance metrics and targets for the executive officers including the annual cash incentive award and performance-based long-term incentive awards. The Compensation Committee also set salary amounts, target annual cash incentive award amounts and long-term incentive award amounts. As Occidental and Anadarko had not begun negotiations that led to the merger agreement until after setting the 2019 compensation program, the impact of the Anadarko acquisition on Occidental’s performance metrics and targets was not taken into account. Following the acquisition, the Compensation Committee decided to end certain incentive programs early, and either forfeit or refocus the remaining incentive opportunities toward post-acquisition priorities.

Long-Term Incentive Awards. The Compensation Committee delivers the majority of the named executive officer compensation opportunity in stock-based, long-term incentive compensation. In 2018 and 2019, 25% and 20% of the target long-term incentive award value of Ms. Hollub and the other named executive officers, respectively, was dependent on long-term cash return on capital employed (CROCE) performance. Because the terms of the outstanding CROCE awards did not include a mechanism for adjustment of the performance target for significant corporate events, such as to account for the impact of the Anadarko acquisition on Occidental’s capital structure, the Compensation Committee determined it was appropriate to conclude and settle a portion of the awards early based on Occidental’s CROCE performance through June 30, 2019, the last balance sheet date before the acquisition. In determining the partial payout under the 2018 and 2019 CROCE awards, the Compensation Committee (i) evaluated Occidental’s CROCE performance during the abbreviated performance periods, which were

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Compensation Discussion and Analysis

met at 200% and 133% of target, respectively, and (ii) reduced the number of shares underlying each award by a proration factor of 50% for the 2018 CROCE award and 83.3% for the 2019 CROCE award, based on the time elapsed in each performance period. The Compensation Committee settled these partial awards in shares of common stock. The executive officers forfeited the portion of the CROCE awards applicable to the periods after June 30, 2019 and did not receive any offsetting or supplemental awards.

Annual Cash Incentive Award. Occidental delivers a smaller portion of the named executive officer compensation opportunity through the annual cash incentive award, based on company and individual performance against pre-set metrics. In light of the Board and shareholder focus on management’s progress in achieving acquisition-related goals, the Compensation Committee bifurcated the company performance portion of the 2019 annual cash incentive award into two performance periods (pre- and post-acquisition) to give significant weight to management’s achievement of acquisition-related goals. The measured company performance in both the pre- and post-acquisition performance periods significantly exceeded expectations, and the Compensation Committee determined that the named executive officers demonstrated outstanding personal performance against their individual performance goals. As a result, the named executive officers earned annual cash incentive award amounts ranging from 133% to 175% of target. Critical drivers of above-target payout were:

2019 Pre-Acquisition Period
Outstanding operational and financial performance against company objectives
Achieved best safety record of all-time
Continued focus on Oxy Low Carbon Ventures carbon-reduction strategies
   
2019 Post-Acquisition Period
Rapid progress toward achieving synergy and divestiture goals within 5 months of closing
Accelerated debt reduction by repaying one-third of the debt raised for the acquisition
Applied operational expertise to Anadarko’s assets with excellent results

The Compensation Committee paid out a significant portion of the annual cash incentive award earned by Ms. Hollub and Messrs. Brown and Burgher in forfeitable, time-vesting restricted stock units (RSUs) in lieu of cash. These named executive officers were integral to the Anadarko acquisition and are principally responsible for executing Occidental’s strategy to unlock the value of the transaction. For these reasons, the Committee determined that it was appropriate for a significant portion of their earned 2019 annual cash incentive award value to be linked to future stock price performance.

Pursuant to the Compensation Committee’s pay-for-performance philosophy, the named executive officers did not receive any supplemental, one-off, or deal-based awards following the closing of the Anadarko acquisition.

Impact of Recent Events on Pay Decisions

The 2020 macroeconomic environment is challenging for our industry and Occidental is taking action to reset its business plan in light of new market realities. Concerning compensation, the Compensation Committee has determined not to adjust the performance conditions underlying the long-term incentive awards granted in February 2020, which in combination are tracking at only 8% of their original grant date fair value. The Compensation Committee has also capped the base salaries of each of the named executive officers at $250,000, and may take further actions as appropriate.

Ultimate Pay Outcomes Aligned with Performance. As the Compensation Committee takes action to align the 2020 compensation program with the interests of our shareholders, Occidental’s significant stock price decline and the fall of crude oil prices have underscored the pay-for-performance nature of the executive compensation program. Pursuant to Securities and Exchange Commission (SEC) rules, this CD&A and the Executive Compensation Tables are principally focused on the Compensation Committee’s 2019 executive compensation decisions and report the value of performance-based stock awards and time-vesting stock awards at their grant date fair value or their value as of December 31, 2019, as required. However, these values have declined precipitously in recent weeks. As of March 24, 2020,

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Occidental’s stock price had decreased over 84% from the grant date of the February 2019 long-term incentive awards, and the outstanding TSR awards granted in 2018, 2019, and 2020 and the CROCE award granted in 2020 were tracking at a 0% payout. The 2019 realizable pay of Occidental’s named executive officers is less than half of the value reported for each named executive officer as total compensation in the Summary Compensation Table on page 56.

Supplemental Summary Compensation Table

The following table intends to illustrate the pay-for-performance nature of the executive compensation program by presenting the realizable pay of the 2019 compensation program for the named executive officers as of March 24, 2020. The Summary Compensation Table (SCT) on page 56 was prepared in accordance with SEC rules and shows, in the “Stock Awards” column (and the “Bonus” and “Non-Equity Incentive Plan Compensation” columns for Ms. Hollub and Messrs. Brown and Burgher), the grant date fair value of stock awards granted in 2019. In the table below, the stock awards are valued based on Occidental’s closing stock price on March 24, 2020 and Occidental’s TSR performance, which is tracking at a 0% payout of the 2019 TSR award.

(1) Amounts shown represent the portion of the annual cash incentive award earned pursuant to the company performance portion for the post-acquisition period. For Ms. Hollub and Messrs. Brown and Burgher, the Compensation Committee determined to settle a significant portion of the annual cash incentive award in time-vesting RSUs in lieu of cash. The “Realizable Bonus” amount shown includes the value of such RSUs and their accrued dividends as of March 24, 2020. For more information regarding the 2019 annual cash incentive award, see “Compensation Discussion and Analysis – Elements of the 2019 Compensation Program – Annual Cash Incentive” on page 41.
(2) Amounts shown reflect the value of the settled 2019 CROCE award, the time-vesting RSU award and the payment or accrual of dividends pursuant to these awards, as applicable, as of March 24, 2020. The TSR award is not projected to pay out.
(3) Amounts shown represent the portion of the annual cash incentive award earned pursuant to the company performance portion for the pre-acquisition period and for individual performance (excluding the portion attributable to the company performance portion for the post-acquisition period, which is shown in the “Realizable Bonus” column). For Ms. Hollub and Messrs. Burgher and Brown, the Compensation Committee determined to settle a significant portion of the annual cash incentive award in timevesting RSUs in lieu of cash. For those officers, the “Realizable Non-Equity Incentive Plan Compensation” amount shown includes the value of such RSUs and their accrued dividends as of March 24, 2020 in addition to the cash component. For more information regarding the 2019 annual cash incentive award, see “Compensation Discussion and Analysis – Elements of the 2019 Compensation Program – Annual Cash Incentive” beginning on page 41.

Our Pay for Performance Accountability

Through the actions and outcomes described above, the Board, the Compensation Committee and senior management remain committed to performance accountability in our compensation programs. The Committee will continue to manage compensation outcomes in line with the performance achieved, especially through these volatile periods. Future incentives will require substantial financial and operating performance to earn payouts. We will keep our investors informed and continue to engage with shareholders about their top priorities for Occidental.

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Compensation Discussion and Analysis

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, 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 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; and
Match or exceed prevailing governance standards for performance-based compensation.

Governance Features of the Executive Compensation Program

The 2019 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.

What We Do
Pay for Performance. A substantial majority of named executive officer compensation is performance-based. The Compensation Committee annually reviews the metrics underlying performance-based compensation 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 2019 decisions to (i) increase the sustainability component of the annual cash incentive award and (ii) align short-term compensation with the achievement of acquisition-related goals.
Clawback in the Event of Misconduct. The Compensation Committee has the authority to claw back annual cash incentive awards and long-term incentive awards for violations of Occidental’s Code of Business Conduct and related policies.
Emphasize Stock Ownership. Long-term incentive awards are payable solely in shares of common stock and the net shares received upon each RSU award vesting are subject to a two-year holding period. In addition, Occidental’s executive officers are subject to meaningful stock ownership guidelines, ranging from three to six times the officer’s annual base salary.
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 Vesting for Equity Awards. Pursuant to the 2015 LTIP, equity awards vest in the event of a change in control only if there is also a qualifying termination of employment.

What We Don’t Do
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).
No Hedging or Derivative Transactions. 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 common stock or transact in derivatives of Occidental’s common stock.
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 senior executive which exceed 2.99 times his or her salary plus annual cash incentive award without shareholder approval.
No Repricing of Stock Options. The 2015 LTIP does not permit the repricing of stock options or stock appreciation rights without shareholder approval.

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Overview of the 2019 Executive Compensation Program

Element    Purpose    Form of
Payout
   How Target Values are
Determined
   2019 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. The Compensation Committee approved base salary increases ranging from 4% to 8% for each named executive officer in 2019. Salary decisions are described in more detail under “Individual Compensation Considerations” beginning on page 49.
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 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.

Consistent with 2018, the 2019 annual cash incentive award evaluated management’s performance against metrics related to Occidental’s operational, financial, strategic, safety/environmental and sustainability performance, and included a qualitative assessment of each officer’s individual contributions.

In light of Board and shareholder focus on management’s progress in achieving acquisition-related goals, the Compensation Committee bifurcated the corporate performance portion of the 2019 annual cash incentive award into two performance periods (pre- and post-acquisition) in order to give significant weight to management’s achievement of acquisition-related goals.

The annual cash incentive is described in more detail under “Elements of the 2019 Executive Compensation Program – Annual Cash Incentive” beginning on page 41. The amount ultimately earned under the annual cash incentive award for each named executive officer is discussed under “Individual Compensation Considerations” beginning on page 49.

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 of the named executive officers 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.

The majority of the long-term incentive award package for each named executive officer is performance-based. The Compensation Committee annually considers the performance criteria to underlie the PSU awards in light of Occidental’s ongoing business objectives.

 

In 2019, the Compensation Committee continued utilizing 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 its 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.

RSU Award Provide a retention incentive that promotes sustained stock ownership and incentivize stock price performance. Stock

In light of the Anadarko acquisition, the Compensation Committee amended the performance periods of the outstanding 2018 and 2019 CROCE awards. The Compensation Committee assessed performance for the 2018 and 2019 CROCE awards through June 30, 2019 and settled such amended awards. The executive officers forfeited the portion of the CROCE awards applicable to the period after June 30, 2019 and did not receive any supplemental awards.

The long-term incentive award program is described in more detail under “Elements of the 2019 Executive Compensation Program – Long-Term Incentive Award Program” beginning on page 45. The target value of the long-term incentive award package of each named executive officer is described under “Individual Compensation Considerations” beginning on page 49.

(1) Mr. Brown did not receive a CROCE award in 2019 as he was not an executive officer when long-term incentive awards were granted in early 2019.

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Compensation Discussion and Analysis

Compensation Program Emphasizes Performance

A substantial majority of named executive officer compensation is dependent on performance.

90% of Ms. Hollub’s (and an average of 85% of the other named executive officers’) 2019 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)

(1) Target Direct Compensation is composed of (i) base salary, (ii) target annual cash incentive award opportunity, and (iii) the grant date fair value of long-term incentive awards.

Executive Compensation Program Considerations

In evaluating the appropriateness of the executive compensation program, the Compensation Committee considers the results of Occidental’s recent advisory votes to approve executive compensation (the Say-on-Pay vote) and other relevant factors, including:

Occidental’s strategic priorities;
Shareholder feedback received through the shareholder engagement program;
Occidental’s recent financial and operational performance relative to company goals and peer company performance;
Input from Ms. Hollub with respect to the performance of the other named executive officers;
Peer company and market pay practices; and
Emerging compensation trends and best practices.

Say-on-Pay Vote. At the 2019 Annual Meeting, Occidental’s Say-on-Pay vote received support from approximately 88% of the total votes cast. This result represented a decline in support as compared to recent years. Based on conversations with our shareholders, the Compensation Committee attributed much of the decline to shareholders that were not in favor of the Anadarko acquisition at the time of the 2019 Annual Meeting, and not due to the features of the executive compensation program. Shareholder focus on management’s achievement of acquisition-related goals following the completion of the acquisition contributed to the Compensation Committee’s decision to bifurcate the company performance portion of the 2019 annual cash incentive award into pre- and post-acquisition performance periods in order to give significant weight to management’s progress against the success of the integration, realizing synergy capture and meeting divestiture targets.

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Participants in the Executive Compensation Decision-Making Process

Role of the Independent Compensation Committee. The Compensation Committee, composed 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 shareholder 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.

Role of Senior Management. Ms. Hollub, as Chief Executive Officer, makes recommendations regarding the compensation package for each of the other named executive officers to the Compensation Committee. For 2019, Ms. Hollub set Mr. Brown’s base salary, annual cash incentive opportunity and target long-term incentive award values given Mr. Brown was not an executive officer at the time that such compensation decisions were made. Ms. Hollub and the senior executives responsible for 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 is discussed and determined. Only the Compensation Committee sets Ms. Hollub’s compensation 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 2019, 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 compensation surveys conducted by compensation consultants, including the Compensation Committee’s independent compensation consultant, in order to better understand general external compensation practices, including with respect to executive compensation.

Role of Shareholders. Occidental maintains an ongoing dialogue with its shareholders. During shareholder engagements, members of Occidental’s senior management team and, on a case-by-case basis, one or more of Occidental’s independent directors, meet with investors telephonically or in person. Input from these meetings regarding Occidental’s executive compensation policies and practices is taken into account by the Compensation Committee in making future compensation decisions. In 2019, for example, shareholder feedback played a critical role in the Compensation Committee’s decision to (i) increase the sustainability portion of the annual cash incentive award and to adopt quantitative sustainability targets, and (ii) bifurcate the company performance portion of the 2019 annual cash incentive award into two performance periods, in order to directly link a significant portion of short-term compensation to management’s progress in achieving acquisition-related goals.

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Compensation Discussion and Analysis

Role of Peer Companies. 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 a “compensation peer group,” as identified below. The Compensation Committee also reviews and considers oil and gas industry 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” within the oil and gas industry, and the value of the TSR awards is dependent on Occidental’s three-year TSR performance as compared to the three-year TSR performance of the companies within the performance peer group. The Compensation Committee regularly reviews these peer groups 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. In 2019, Anadarko was removed from the peer groups as a result of Occidental’s acquisition of Anadarko.

Company(1)       Stock
Ticker
      Compensation
Peer
      Performance
Peer
      Market
Capitalization at
12/31/19
($ in billions)(2)
Apache Corporation APA            $ 9.6
Canadian Natural Resources Limited CNQ $ 38.3
Chevron Corporation CVX $ 227.9
ConocoPhillips COP $ 71.4
Devon Energy Corporation DVN $ 10.0
EOG Resources, Inc. EOG $ 48.7
ExxonMobil Corporation XOM $ 295.2
Hess Corporation HES $ 20.4
Marathon Oil Corporation MRO $ 10.9
Total S.A. TOT $ 143.5
(1) Total S.A. and Canadian Natural Resources Limited are not in our compensation peer group because we generally do not compete with them for executive talent, as they are headquartered outside of the United States.
(2) Source: Bloomberg.

Elements of the 2019 Compensation Program

Salary

The Compensation Committee believes that base salary should reward executives on a market-competitive basis for consistent performance of job requirements and the achievement of short-term goals. Salaries are reviewed by the Compensation Committee annually and as circumstances warrant. In determining base salary levels, the Compensation Committee reviews compensation surveys, publicly available peer company data, internal pay equity, individual responsibilities, and performance assessments. Base salary and “other” annual compensation (perquisites and certain other employee benefits) represented, on average, less than 17% of the 2019 compensation packages of the named executive officers, based on compensation as reported in the Summary Compensation Table on page 56. For information regarding salary decisions for the named executive officers in 2019, see “Individual Compensation Considerations” beginning on page 49.

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Annual Cash Incentive

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, the Compensation Committee approves 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 annual cash incentive 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 annual cash incentive award for 2019, which were paid in the first quarter of 2020, are reflected in the “Non-Equity Incentive Plan Compensation” column and “Bonus” column, as applicable, of the Summary Compensation Table on page 56, as further described below.

Setting the Initial Annual Cash Incentive. The Compensation Committee annually reviews all facets of the annual cash incentive award, 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 2019, the Compensation Committee approved metrics related to the company’s operational, financial, strategic, safety/ environmental and sustainability goals. The Compensation Committee promoted sustainability to a stand-alone key corporate objective in 2019 in light of the increasing focus on sustainability as part of the company’s strategy and shareholder feedback that encouraged further emphasis on quantitative sustainability metrics in the executive compensation program. 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 Metrics. The Compensation Committee determined that company performance metrics would comprise 80% of Ms. Hollub’s target annual cash incentive award, and 60% for the other named executive officers, with the remainder of the annual cash incentive award opportunity linked to an assessment of the performance of the individual executive. The Compensation Committee determined to weight a larger portion of Ms. Hollub’s annual cash incentive award opportunity toward key company performance metrics because, as Chief Executive Officer, her leadership directly affects all aspects of the company’s performance.

Shifted Focus of the Annual Cash Incentive following the Anadarko Acquisition. Following the closing of the Anadarko acquisition in August 2019, the Compensation Committee determined to adjust the annual cash incentive award to link a significant portion of the award opportunity to acquisition-related performance in light of Occidental’s focus in the second half of 2019 on realizing the benefits of the acquisition. The Compensation Committee bifurcated the award into two performance periods – the pre-acquisition performance period ran from January 1, 2019 to June 30, 2019 (the last reported balance sheet date prior to the completion of the acquisition) and the post-acquisition performance period ran from July 1, 2019 to December 31, 2019. With respect to the pre-acquisition performance period, the Compensation Committee evaluated mid-year performance against the pre-set goals to account for a first-half-of-year performance period. For the post-acquisition performance period, the Compensation Committee established strategic performance objectives related to realizing synergies, completing non-core asset sales, reducing capital expenditures while maintaining production, executing a successful integration strategy and achieving excellent year-end results on a combined basis with respect to the key corporate objectives of the pre-acquisition performance period. In early 2020, the Compensation Committee conducted a qualitative review of management’s achievements against these objectives. Details regarding Occidental’s performance during each performance period is summarized in the tables that follow.

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Compensation Discussion and Analysis

2019 Annual Cash Incentive Award

January 1 – June 30, 2019 – Pre-Acquisition Company Performance Portion

Weight Potential
Payout Range
Performance Measure Target Performance Result as of
June 30, 2019
Achieved
Score Range
(0% - 200%)
Weighted
Score Range
0% - 60% Production from Ongoing Operations 727 MBOED(2) 728 MBOED 140% - 160% 42% - 48%
Oil and Gas Op. Ex. per BOE $11.60 per BOE(2) $11.25 per BOE
0% - 60% CROCE(1) 10%(2) 11% 195% - 200% 56% - 60%
Core EPS(1) $1.18(2) $1.81
0% - 40% Cash Flow Management
Develop lower decline, lower capital intensive cash flow through:
Conventional reservoirs with pressure support
Conventional reservoirs with enhanced oil recovery (EOR) potential
Above Target(3) 120% - 130% 24% - 26%
Cost Structure of Enhanced Oil Recovery
Develop technology and initiatives that can lower the cost structure of EOR, with an emphasis on:
Lower capital costs
Lower operating expenditures
Above Target(3)
0% - 20% Combined Employee/Contractor IIR <0.29(4) 0.26 120% - 130% 12% - 13%
Combined Employee/Contractor DART <0.17(4) 0.15
Oil Spills No net oil release > 500 barrels impacting fresh water None
Risk No “4” or “5” level incident None


0% - 20%
Advancement of CCUS Advance CCUS projects by sanctioning projects capturing 40 MMcfpd of CO2 Above Target(5) 145% - 155% 15% - 16%
Advance CCUS technology by sanctioning 2 carbon reduction projects Above Target(5)
Carbon Capture Develop pre-FEED/feasibility projects capturing 500 MMcfpd of CO2 Above Target(5)

PRE-ACQUISITION COMPANY PERFORMANCE PORTION TOTAL:

150% - 160%

(1) CROCE and Core Earnings per Share (Core EPS) are non-GAAP measures. See Annex E for reconciliations to GAAP.
(2) Reflects adjusted target set by the Compensation Committee, in order to reflect a first-half-of-year performance period.
(3) Strategic objectives were deemed met above target based on: Occidental’s oilfield optimization program results; successful initiatives to improve initial production and estimated ultimate recovery rates; and expected finding and development (F&D) cost improvements in Permian enhanced oil recovery (EOR) operations; start-up of a solar facility to directly power an EOR field in the Permian Basin, which is expected to reduce the cost and carbon intensity of those operations.
(4) Occidental’s combined employee and contractor Injury Incidence Rate (IIR) is determined by multiplying the total number of Occupational Safety and Health Administration (OSHA) recordable injuries and illnesses by 200,000 and dividing that result by the total number of hours worked by all employees and contractors. The DART rate is calculated in the same manner as IIR, but uses the number of incidents that resulted in days away from work, job transfer, or restricted job duties instead of the number of recordable injuries or illnesses.
(5) Sustainability objectives were deemed met above target as OLCV announced: an equity investment in a clean energy company to accelerate the commercialization of a direct air capture technology; investment in a bio-technology start-up to advance the development of using CO2 as a feedstock for chemicals; investment in a capture plant intended to supply Occidental’s EOR operations with anthropogenic CO2. Additionally, OLCV is in various stages of feasibility and pre-FEED studies for projects intended to advance innovative low-carbon technology, including CCUS opportunities.

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July 1 – December 31, 2019 – Post-Acquisition Company Performance Portion

Objectives         Target Performance         Key Results at December 31, 2019

Capture Synergies from Anadarko Acquisition

Significant progress capturing the $2 billion in post-acquisition synergies committed

Over $1 billion in synergies achieved by year-end 2019 and on-track for full synergy capture.

Complete Non-Core Asset Sales

Significant progress against announced $10 billion to $15 billion in asset sales within two years of the closing of the acquisition

Closed or under contract to sell over $10 billion of the $15 billion divestiture goal, with other potential asset sales identified.

Achieve Annual Capital Reduction

Reduce annual capital expenditures by $1.5 billion to $2 billion while maintaining production

Budgeted and communicated a 2020 capital plan that exceeded $1.5 billion capital reduction target as of December 31, 2019.

Execute Successful Integration Strategy

Efficiently achieve integration milestones to deliver shareholder value with a focus on strengthening the balance sheet

Closed Anadarko acquisition ahead of schedule.
Executed successful oil hedging program covering 350,000 BOPD, intended to support cash flow stability in the post-acquisition period.
Identified and acted on non-core asset sales, resulting in early repayment of term loans.
Negotiated and executed agreements that allow Western Midstream to operate as an independent midstream company to support third-party growth opportunities.
Established a $1.5 billion joint venture with Ecopetrol that allows Occidental to accelerate its development plans in the Midland Basin.

Maintain Focus on Pre-Acquisition Performance Measures

Excel in the key performance measures established in the pre-acquisition period

Demonstrated a continued focus on core operational, financial, strategic, safety and environmental, and sustainability objectives

POST-ACQUISITION COMPANY PERFORMANCE PORTION TOTAL(1):

190 - 200%

TOTAL COMPANY PERFORMANCE PORTION PAYOUT (FULL YEAR)(2):

175%

(1) Achievement of the objectives during the post-acquisition company performance period was subject to a qualitative evaluation by the Compensation Committee resulting in the payout percentage indicated. The objectives were not subject to any specific weightings.
(2) The formula for payout equally weighted both company performance periods at the midpoint of the score range, resulting in the total payout percentage indicated.

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Compensation Discussion and Analysis

Annual Cash Incentive Award – Individual Performance Portion. The individual performance portion of the annual cash incentive 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, 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:

Enhance the value of Occidental’s portfolio of assets, with a focus on profitable development opportunities for all segments of Occidental;
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;
Implement the Board-approved strategic plan in a timely, beneficial and efficient manner;
Focus 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; and
Continue emphasis on identifying and developing Occidental’s future leadership.

For a detailed discussion of the Compensation Committee’s considerations with respect to each named executive officer’s individual performance and resulting payouts, please see Individual Compensation Considerations” beginning on page 49.

Determining Annual Cash Incentive Award Payout. In determining the total 2019 payout percentage of the company performance portion of the annual cash incentive award, the Compensation Committee weighted the results of each performance period equally, which resulted in a payout of the company performance portion at 175% of target. Including the individual performance portion, final payout amounts under the annual cash incentive award ranged from 133% to 175% of target. The Compensation Committee determined to pay out a significant portion of the annual cash incentive award earned by Ms. Hollub and Messrs. Brown and Burgher in forfeitable, time-vesting RSUs in lieu of cash. These named executive officers were integral to the Anadarko acquisition and are principally responsible for executing Occidental’s strategy to unlock the value of the transaction. For these reasons, the Compensation Committee determined that it was appropriate for a portion of their 2019 annual cash incentive award payout to be linked to future stock price performance.

Significant Portion of Annual Cash Incentive Award Payout Awarded in Time-Vesting RSUs

Officer       Portion Awarded in the Form of
Time-Vesting RSUs(1)
      Portion Paid
in Cash
      Annual Cash Incentive Percentage
Awarded in Time-Vesting RSUs
V. Hollub $2,531,250 $1,012,500 71%
O. Brown $900,000 $1,200,000 43%
C. Burgher $750,000 $1,000,000 43%
(1) The RSUs vest ratably over three years with one-third vesting on each of February 28, 2021, 2022 and 2023, subject to continued employment. Amounts shown reflect the grant date fair value of the RSUs. As of March 24, 2020, the RSUs for Ms. Hollub and Messrs. Brown and Burgher were valued at $652,291, $231,927 and $193,271, respectively.

Due to the timing of the Compensation Committee’s adjustments to the annual cash incentive award and the nature of the qualitative assessment of company performance in the post-acquisition performance period, the amounts earned under the corporate performance portion for the pre-acquisition period are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 56 and amounts earned for company performance in the post-acquisition period are reported in the “Bonus” column of the Summary Compensation Table on page 56.

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Long-Term Incentive Award Program

The majority of named executive officer compensation is determined by Occidental’s long-term performance. In 2019, the long-term incentive program consisted of a performance-based TSR award, a performance-based CROCE award (for all named executive officers other than Mr. Brown) and a time-based RSU award, 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 officer’s total compensation package and that the levels of payout ultimately achieved should reflect Occidental’s performance, both relative to peer company performance and on an absolute basis. During the process of determining each named executive officer’s long-term incentive compensation package for 2019, the Compensation 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.

2019 Long-Term Incentive Award Program. The 2019 long-term incentive program consisted of two performance-based stock unit (PSU) awards (one based on Occidental’s TSR and the other based on absolute CROCE performance), and a time-based RSU award, with the majority of the target long-term incentive award opportunity weighted toward PSUs, as indicated below.

2019 Long-Term Incentive Award Mix at Grant Date

Chief Executive Officer      Other Named Executive Officers(1)

(1)

Excludes Mr. Brown, who did not receive a CROCE award in 2019, as he was not an executive officer at the time of the long-term incentive award grants. The 2019 CROCE awards for the other named executive officers were amended in 2020 in light of the Anadarko acquisition, resulting in the early termination and settlement of a portion of the award. Shares relating to the performance period after June 30, 2019 were forfeited, as further described under “Long-Term Incentive Award Program – CROCE Award Amendments” on page 46.

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 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 shareholder value. Payout of the TSR award is based on Occidental’s three-year TSR as compared to the three-year TSR of the ten performance peer companies identified on page 40. 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, 2019 and ends December 31, 2021, will depend on Occidental’s relative and

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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)
Top 1-2 ranked companies 200%
Top 3-7 ranked companies Between 25% and 200% (2)
8th ranked company 25%
Bottom 3 ranked companies 0%  

(1)

If Occidental’s absolute TSR is negative over the performance period, the payout of the TSR award is capped at no more than target, irrespective of Occidental’s ranking within the peer group.

(2)

Determined using linear interpolation.

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 45%, 50% and 35% of Ms. Hollub’s, Mr. Brown’s, and the other named executive officers’ target long-term incentive award opportunity for 2019, 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. Forfeiture and change in control provisions applicable to the TSR award are discussed in more detail in the Potential Payments table and the accompanying footnotes, beginning on page 62. As of March 24, 2020, the TSR award is not expected to pay out.

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% and 20% of Ms. Hollub’s and the other named executive officers’ (other than Mr. Brown’s) initial target long-term incentive award opportunity for 2019, respectively. Mr. Brown did not receive a CROCE award in 2019 as he was not an executive officer when 2019 long-term incentive awards were granted. A table illustrating the potential payout of the CROCE award based on CROCE performance is set forth below:

CROCE Performance Targets(1) % of Target PSUs Earned(2)
CROCE ≥ 24%

200%

CROCE of 21%

100%

CROCE of 18%

25%

CROCE < 18%

0%

(1)

See page 163 for the formula to calculate CROCE.

(2)

Payout percentages for CROCE values between 18% and 24% to be determined using linear interpolation between 25% and 200% of target, with a target payout at a CROCE of 21%.

CROCE Award Amendments. In light of the Anadarko acquisition, which materially altered Occidental’s capital structure such that the performance targets underlying the 2018 and 2019 CROCE awards were no longer suitable measures to evaluate management’s performance on a go-forward basis, the Compensation Committee amended the performance periods of the outstanding 2018 and 2019 CROCE awards in February 2020. The Compensation Committee amended the performance period for the 2018 CROCE awards to run from January 1, 2018 through June 30, 2019, and for the 2019 CROCE awards to run from January 1, 2019 through June 30, 2019 (the last reported balance sheet date prior to the completion of the acquisition). The target number of PSUs granted under the applicable awards were then reduced on a pro-rata basis to reflect the shortened performance period and the remaining target PSUs were forfeited. For the 2018 CROCE awards, CROCE performance for the truncated performance period was assessed based on a weighted average of Occidental’s (i) 2018 CROCE and (ii) CROCE from January 1, 2018 to June 30, 2019. Occidental’s CROCE was above maximum, which resulted in 200% of the adjusted target PSUs (or 100% of the originally granted target PSUs) becoming earned. Vesting of these 2018 CROCE awards was accelerated and the awards, plus

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accrued dividend equivalents, settled in February 2020. For the 2019 CROCE awards, CROCE performance for the truncated performance period from January 1, 2019 to June 30, 2019 was annualized, resulting in 133% of the adjusted target PSUs (or approximately 22% of the originally-granted target PSUs) becoming earned. Vesting of the 2019 CROCE awards was accelerated and the awards, plus accrued dividend equivalents, settled in February 2020.

Despite these adjustments to the CROCE awards, in accordance with applicable SEC reporting requirements, the full grant date fair values of the original CROCE awards are included in the “Stock Awards” column of the Summary Compensation Table on page 56 and, for the 2019 CROCE awards, in the Grants of Plan-Based Awards table on page 57. The forfeiture and change in control provisions applicable to the CROCE awards as in effect on December 31, 2019 are discussed in more detail in the Potential Payments upon Termination or Change in Control table, although these awards were settled early in 2020.

Restricted Stock Unit (RSU) Award. The RSU award, which comprises the remainder of the 2019 long-term incentive program package, vests ratably over three years with one-third vesting on each of February 28, 2020, 2021 and 2022, 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 post-vesting holding period. Dividend equivalents are accrued and paid out upon vesting. Forfeiture and change in control provisions applicable to the RSU award are discussed in more detail in the Potential Payments table and the accompanying footnotes, beginning on page 62. As of March 24, 2020, the RSU awards had decreased in value from the grant date by over 84%.

Changes to Long-Term Incentive Award Mix for 2020

The Compensation Committee determined to adjust the structure and weighting of the long-term incentive award program in 2020 to better align management incentives with Occidental’s performance priorities following the acquisition of Anadarko. In light of shareholder emphasis on absolute stock price performance, a review of peer company practices and with input from the Compensation Committee’s independent compensation consultant, the Compensation Committee determined to retain the CROCE, TSR and RSU awards and added stock options to the program. The Compensation Committee weighted the awards such that the grant date fair value of each executive officer’s target 2020 long-term incentive award package was equally weighted among CROCE, TSR, RSU and stock options. The Compensation Committee annually evaluates the appropriateness of the long-term incentive award program in light of shifts in Occidental’s strategic priorities, peer company practices and shareholder feedback, and will continue to do so in future years.

2020 Long-Term Incentive Award Mix at Grant Date

Stock Option Features(1)
3-year pro rata vesting
10-year term
Strike price equal to fair market value at the date of grant

(1)

A portion of the value of Ms. Hollub’s 2020 stock option award was delivered in cash-settled stock appreciation rights.

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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 2019, the defined contribution 401(k) savings plan (Savings Plan) permitted employees to save a percentage of their annual salary up to the $280,000 limit set by IRS regulations, and employee pre-tax contributions were limited to $19,000. 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 56.

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 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. The 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 56.

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-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 provided on page 61. 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 56. None of the executive officers participated in the MDCP in 2019. The contributions, aggregate earnings, withdrawals and aggregate balances for the named executive officers in the SRP II and MDCP with respect to 2019 are shown in the Nonqualified Deferred Compensation table on page 61. No above-market earnings were paid to the named executive officers in 2019 under either the SRP II or the MDCP.

Other Personal Benefits

Occidental provides a limited number of other personal benefits for its named executive officers, which, in 2019, consisted principally of fees related to financial counseling and tax preparation services, excess liability insurance, and an annual physical. In addition, Ms. Hollub’s personal benefits included the use of a car service for business travel, which Occidental provides for efficiency and security purposes.

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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 2019 compensation decisions and performance evaluation of each named executive officer are presented below.

Vicki Hollub
President and Chief Executive Officer

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, including roles in the United States, Russia, Venezuela and Ecuador.

Performance Assessment. In assessing Ms. Hollub’s individual performance in 2019, the Compensation Committee considered her accomplishments in the areas identified as individual performance goals on page 44. Highlights of the individual performance assessment are set forth below.

Ms. Hollub enhanced the value of Occidental’s portfolio of assets through the Anadarko acquisition, which strengthened Occidental’s long-term value proposition. Following the acquisition, Ms. Hollub rapidly made significant progress toward fully achieving Occidental’s synergy capture goals and meeting divestiture targets. Within five months of the closing of the acquisition, Occidental captured $799 million of overhead synergies, $83 million of operating synergies and $323 million of capital synergies and repaid $7 billion of debt with the proceeds of non-core asset sales and free cash flow. Ms. Hollub also executed a successful oil hedging program to support cash flow stability during the near-term post-acquisition period.
Ms. Hollub maintained Occidental’s focus on capital discipline throughout the budgeting process in 2019 to balance spending with projected cash flow. The 2020 capital budget is expected to deliver a $3.6 billion capital reduction compared to the 2019 pro forma capital budget.
Under Ms. Hollub’s leadership, Occidental continued to achieve superior well results through the application of Occidental’s proprietary drilling process and subsurface expertise, which is now being applied to Anadarko’s acreage with positive results. In 2019, Occidental delivered 32 of the 100 best wells in the Delaware Basin on a six-month cumulative-oil basis.
Ms. Hollub also continued to emphasize the importance of Occidental’s commitment to health, safety and the environment. In 2019, Occidental achieved the lowest combined Injury and Illness Incident Rate (IIR) in both Occidental’s and Anadarko’s history.
Ms. Hollub also reinforced Occidental’s commitment to operating a sustainable business, as Occidental joined the Oil and Gas Climate Initiative, published its second Climate Report and continued to emphasize the work of OLCV. OLCV is focused on advancing low-carbon technologies and business solutions that economically grow Occidental’s business while reducing emissions. OLCV also invests in the development of low-carbon fuels and products, as well as sequestration services to support carbon capture projects globally.

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COMPENSATION DECISIONS

Base salary: Ms. Hollub’s base salary was increased by 8% in February 2019, which the Compensation Committee determined was appropriate in consideration of Ms. Hollub’s 2018 performance assessment, compensation surveys, publicly available peer company data and internal pay equity. This was Ms. Hollub’s first increase in base salary since 2016.
Annual Cash Incentive: Ms. Hollub’s target annual cash incentive award opportunity was set in February 2019 at $2,025,000, an 8% increase from 2018, commensurate with Ms. Hollub’s increase in base salary, which the Compensation Committee determined was appropriate to retain an annual cash incentive award target of 150% of Ms. Hollub’s base salary and in consideration of the compensation review described above. The company performance portion of the annual cash incentive award was earned at 175% of target. Based on Ms. Hollub’s individual achievements described above, the Compensation Committee determined to pay out over 70% of Ms. Hollub’s annual cash incentive award in forfeitable, time-vesting RSUs in lieu of cash, as further described in “Elements of the 2019 Compensation Program – Annual Cash Incentive – Determining Annual Cash Incentive Award Payout” on page 44.
Long-Term Incentives: The target grant date value of Ms. Hollub’s long-term incentive award package for 2019 was $10,500,000, an approximate 11% increase from 2018, which the Compensation Committee determined was appropriate in recognition of Ms. Hollub’s 2018 performance assessment, compensation surveys, and a review of publicly available peer company data. 70% of Ms. Hollub’s target long-term incentive award opportunity is performance-based and will be realized only if Occidental meets or exceeds the performance targets described in “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program” on page 45.


Edward A. Lowe
Executive Vice President and Group Chairman, Middle East

Mr. Lowe has served as Executive Vice President of Occidental since 2015 and Group Chairman, Middle East, since 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 Occidental’s record-high production from Al Hosn Gas in 2019; the cost-effective expansion of Al Hosn Gas’s capacity to 145% in 2019; his support to the award of a 1.5 million acre exploration contract in Block 3 near the Al Hosn plant; and his critical involvement in supporting the negotiation and signing of the agreement for the exploration and production sharing contract in Block 72 in Oman.

COMPENSATION DECISIONS

Base salary: Mr. Lowe’s base salary increased by 4% in February 2019, which the Compensation Committee determined was appropriate in consideration of Mr. Lowe’s 2018 performance assessment, compensation surveys, publicly available peer company data and internal pay equity. Mr. Lowe had not had an increase in base salary since 2014.
Annual Cash Incentive: Mr. Lowe’s target annual cash incentive award opportunity was set at $750,000, unchanged from 2018. The company performance portion of the annual cash incentive award was earned at 175% of target. Based on Mr. Lowe’s individual achievements described above, the Compensation Committee determined that the individual performance portion of the annual cash incentive award was earned at 71% of target.
Long-Term Incentives: The target grant date value of Mr. Lowe’s long-term incentive award package for 2019 was $3,500,000, unchanged from 2018. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program” on page 45.

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Marcia E. Backus
Senior Vice President, General Counsel and Chief Compliance Officer

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 has been an employee of Occidental since 2013.

Performance Assessment. In assessing Ms. Backus’ performance, the Compensation Committee considered her instrumental involvement in negotiating the Anadarko acquisition and related financing transactions and, in connection therewith, the agreement to sell Anadarko’s Africa assets. With respect to litigation, Ms. Backus demonstrated superior performance in handling litigation matters, developed and implemented proven litigation strategies, and achieved successful outcomes. Ms. Backus also oversaw the successful integration of Anadarko’s legal department and compliance functions.

COMPENSATION DECISIONS

Base salary: Ms. Backus’s base salary increased by approximately 4% in February 2019, which the Compensation Committee determined was appropriate in consideration of Ms. Backus’s 2018 performance assessment, compensation surveys, publicly available peer company data and internal pay equity. Ms. Backus has not had an increase in base salary since 2016.
Annual Cash Incentive: Ms. Backus’s target annual cash incentive award opportunity was set at $800,000, unchanged from 2018. The company performance portion of the annual cash incentive award was earned at 175% of target. Based on Ms. Backus’s individual achievements described above, the Compensation Committee determined that the individual performance portion of the annual cash incentive award was earned at 175% of target.
Long-Term Incentives: The target grant date value of Ms. Backus’s long-term incentive award package for 2019 was $3,000,000, unchanged from 2018. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program” on page 45.

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Cedric W. Burgher
Senior Vice President and Chief Financial Officer

Mr. Burgher joined Occidental as Senior Vice President and Chief Financial Officer in 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. In this role, Mr. Burgher was responsible for Occidental’s tax, treasury and controller functions as well as investor relations.

Tenure. Mr. Burgher has been an employee of Occidental since 2017. On April 3, 2020, Mr. Burgher transitioned to another role within Occidental.

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 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. Burgher’s contributions also included his efforts related to the Anadarko acquisition, financing and integration. This work included successful bond market and bank financings, commodity price hedges, overhead reductions, tax efficiencies and other integration matters.

COMPENSATION DECISIONS

Base salary: Mr. Burgher’s base salary increased by approximately 7% in February 2019, which the Compensation Committee determined was appropriate in light of a review of Mr. Burgher’s individual responsibilities and 2018 performance assessment, compensation surveys, publicly available peer company data and internal pay equity.
Annual Cash Incentive: Mr. Burgher’s target annual cash incentive award opportunity was set at $1,000,000, an approximate 25% increase from 2018, which the Compensation Committee determined was appropriate in light of the compensation review described above. The company performance portion of the annual cash incentive award was earned at 175% of target. Based on Mr. Burgher’s individual achievements described above, the Compensation Committee determined that the individual performance portion of the annual cash incentive award was earned at 175% of target. The Compensation Committee determined to pay out over 40% of Mr. Burgher’s annual cash incentive award in forfeitable, time-vesting RSUs in lieu of cash, as further described in “Elements of the 2019 Compensation Program – Annual Cash Incentive – Determining Annual Cash Incentive Award Payout” on page 44.
Long-Term Incentives: The target grant date value of Mr. Burgher’s long-term incentive award package for 2019 was $3,400,000, an approximate 13% increase from 2018, which the Compensation Committee determined was appropriate in light of the compensation review described above. For information regarding how the Compensation Committee determines individual long-term incentive award amounts, see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program” on page 45.

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Oscar K. Brown
Senior Vice President, Strategy, Business Development and Supply Chain


Mr. Brown was Senior Vice President, Strategy, Business Development and Supply Chain from 2018 to March 2020. Mr. Brown joined Occidental from Bank of America Merrill Lynch, where he most recently served as managing director and co-head of Americas Energy Investment Banking. He has more than 25 years of energy banking experience in 25 countries, advising on $200 billion of M&A, joint venture, IPO, convertible, commodities and debt transactions for exploration and production, integrated oil, chemical, midstream and oil field service companies. Mr. Brown was responsible for the company’s global business development functions and advising and executing on new business models, commercial strategies and acquisition and divestiture opportunities. Mr. Brown also oversaw global supply chain including vendor relationships, service and equipment delivery, inventory management and SAP integration.

Tenure. Mr. Brown was an employee of Occidental from 2016 to March 2020.

Performance Assessment. In assessing Mr. Brown’s performance, the Compensation Committee considered his leadership and management of his functional areas of responsibility including global business development and global supply chain management, as well as his leadership and support of Occidental’s overall strategic goals. Mr. Brown was instrumental in analyzing, negotiating, coordinating and executing the Anadarko acquisition, the related financing transactions, the agreement to sell Anadarko’s Africa assets and supporting general investor, rating agencies and media engagements. He played similar roles in establishing a $1.5 billion joint venture with Ecopetrol in the Midland Basin, and the negotiation and execution of agreements that allow Western Midstream to better compete for third-party business, and led the sale of Occidental’s remaining equity interest in Plains, as well as certain other non-core assets. He served as Occidental’s designated director on the governing Board of Plains until Occidental exited from its ownership position in late 2019, and served on the Boards of Western Midstream and the Ecopetrol JV. In addition, Mr. Brown oversaw the successful integration of Anadarko’s supply chain and procurement functions, the realization of initial supply chain driven synergies and cost savings, and served on oversight committees related to the overall integration of Anadarko and the implementation of SAP.

COMPENSATION DECISIONS

Base salary: As Mr. Brown became an executive officer of Occidental after 2019 compensation decisions were made, Mr. Brown’s base salary was set by Ms. Hollub at $640,000 for 2019. Starting in 2020, Mr. Brown’s base salary and other elements of his compensation package were determined by the Compensation Committee.

Annual Cash Incentive: Mr. Brown’s target annual cash incentive award opportunity was set by Ms. Hollub at $1,200,000. The company performance portion of the annual cash incentive award was earned at 175% of target. Based on Mr. Brown’s individual achievements described above, the Compensation Committee determined that the individual performance portion of the annual cash incentive award was earned at 175% of target. The Compensation Committee determined to pay out over 40% of Mr. Brown’s annual cash incentive award in forfeitable, time-vesting RSUs in lieu of cash, as further described in “Elements of the 2019 Compensation Program – Annual Cash Incentive – Determining Annual Cash Incentive Award Payout” on page 44.

Long-Term Incentives: The target grant date value of Mr. Brown’s long-term incentive award package for 2019 was $2,600,000, an approximate 18% increase from 2018, which Ms. Hollub determined was appropriate in light of in light of a review of Mr. Brown’s individual responsibilities and 2018 performance assessment, compensation surveys, publicly available peer company data and internal pay equity.


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Additional Compensation Policies and Practices

Stock Ownership Guidelines

Occidental’s stock ownership guidelines are intended to more closely align the interests of the named executive officers with those of the company’s shareholders. The ownership guidelines range from three-to-six times the officer’s annual base salary, based on position, as illustrated below:

Position Multiple of Base Salary
Chief Executive Officer 6
Chief Financial Officer 4
Executive Vice Presidents 4
Senior Vice Presidents 3

Unvested performance-based stock awards and performance-based stock units 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.

Equity Grant Practices

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 awards was based on the closing price of Occidental’s common stock on the NYSE on the day the Compensation Committee granted the 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. 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 who are not executive officers.

Potential Recoupment of Compensation Due to 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 annual cash incentive award and 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:

Disciplinary action, which may include termination, referral for criminal prosecution and reimbursement to Occidental or others for any losses or damages resulting from the violation.
Forfeiture of stock awards, in whole or in part, in the case of an employee’s termination for cause.
Forfeiture or reduction of the annual cash incentive award for violations of the Code of Business Conduct or related policies.

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.

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Risk Assessment of Compensation Policies and Practices

Although the majority of the executive compensation program is performance-based, the Compensation Committee believes Occidental’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 compensation programs include multiple features that appropriately control motivations for excessive risk-taking and that the compensation programs do not encourage excessive risk-taking. With respect to the executive compensation program, the compensation features that are indicative of appropriate risk-taking include:

Diversified Performance Metrics. The annual cash incentive award and long-term incentive awards consider multiple performance criteria, rather than a single metric.

Balanced Pay Mix. The total compensation opportunity features an effective balance between short- and long-term compensation components.

Capped Awards. Performance-based stock awards and the annual cash incentive award are capped as a percentage of the targeted award and payout of the TSR award is capped at target if Occidental’s absolute TSR is negative over the performance period.

Stock Ownership Guidelines. Meaningful stock ownership guidelines and holding requirements for executives encourage a long-term perspective and require holding stock for extended periods.

Clawback Provisions. The annual cash incentive award and long-term incentive awards are subject to clawback provisions beyond legal requirements, including forfeiture and recoupment provisions of awards in the event of violations of Occidental’s Code of Business Conduct.

Anti-Hedging Provisions. Occidental’s executive officers, directors and other employees are prohibited from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that are designed to, or have the effect of, hedging or offsetting any decrease in the market value of Occidental’s securities.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the preceding Compensation Discussion and Analysis section for the year ended December 31, 2019. 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 Statement for the 2020 Annual Meeting of Shareholders.

Respectfully submitted,

THE EXECUTIVE COMPENSATION COMMITTEE

Jack B. Moore (Chair)
Spencer Abraham
William R. Klesse
Margarita Paláu-Hernández
Robert M. Shearer

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EXECUTIVE COMPENSATION TABLES

                
        
Summary Compensation
SUMMARY COMPENSATION TABLE
Name and Principal Position    Year     Salary(1)     Bonus(2)     Stock
Awards(3)
   Non-Equity
Incentive Plan
Compensation(4)
   All Other
Compensation(5)
    Total    Realizable Total
Compensation(6)
Vicki Hollub
President and Chief Executive Officer
2019 $ 1,330,769 $ 1,417,500 $ 10,500,091      $ 2,126,250         $ 616,293 $ 15,990,903      $4,405,234
2018 $ 1,250,000 $ 0 $ 9,500,135 $ 2,812,500 $ 543,058 $ 14,105,693 $5,852,395
2017 $ 1,250,000 $ 0 $ 8,500,028 $ 2,475,000 $ 450,832 $ 12,675,860 $4,965,384
Edward Lowe
Executive Vice President and Group Chairman, Middle East
2019 $ 645,192 $ 393,750 $ 3,500,073 $ 606,250 $ 251,054 $ 5,396,319 $2,268,075
2018 $ 625,000 $ 0 $ 3,500,104 $ 975,000 $ 233,162 $ 5,333,266 $2,387,375
2017 $ 625,000 $ 1,250,000 $ 3,500,078 $ 885,000 $ 214,541 $ 6,474,619 $3,462,223
Marcia Backus
Senior Vice President, General Counsel and Chief Compliance Officer
2019 $ 724,231 $ 420,000 $ 3,000,098 $ 980,000 $ 276,514 $ 5,400,843 $2,719,464
2018 $ 700,000 $ 0 $ 3,000,109 $ 1,200,000 $ 275,849 $ 5,175,958 $2,650,898
2017 $ 700,000 $ 0 $ 3,000,090 $ 1,124,000 $ 219,370 $ 5,043,460 $2,461,380
Cedric Burgher(7)
Senior Vice President and Chief Financial Officer
2019 $ 765,385 $ 525,000 $ 3,400,105 $ 1,225,000 $ 290,477 $ 6,205,967 $2,610,348
2018 $ 700,962 $ 125,000 $ 3,000,109 $ 1,250,000 $ 239,922 $ 5,315,993 $2,790,933
2017 $ 353,425 $ 125,000 $ 2,500,046 $ 804,000 $ 54,521 $ 3,836,992 $2,219,789
Oscar Brown(7)
Senior Vice President, Strategy, Business Development and Supply Chain
2019 $ 632,308 $ 630,000 $ 2,600,061 $ 1,470,000 $ 328,557 $ 5,660,926 $2,676,255
(1)

Includes any salary amounts voluntarily deferred by the executive officer pursuant to Occidental’s Modified Deferred Compensation Plan (MDCP).

(2)

For 2019, amounts shown represent the portion of the annual cash incentive award earned pursuant to the company performance portion for the post-acquisition period. For Ms. Hollub and Messrs. Brown and Burgher, the Compensation Committee determined to settle a significant portion of the annual cash incentive award in time-vesting RSUs in lieu of cash. The “Bonus” amount shown includes a portion of the bonus that, in lieu of being paid out in cash, was paid in the form of time-vesting RSUs with a grant date fair value of $1,265,625 for Ms. Hollub; $450,000 for Mr. Brown; and $375,000 for Mr. Burgher. For more information regarding the 2019 annual cash incentive award, see “Compensation Discussion and Analysis – Elements of the 2019 Compensation Program – Annual Cash Incentive” on page 41.

(3)

For 2019, amounts shown represent the aggregate grant date fair value of the CROCE, RSU and TSR long-term incentive awards granted to the named executive officers (other than Mr. Brown, who received only an RSU and TSR award). The grant date fair value of each of the CROCE and RSU awards equals the target number of stock units granted multiplied by $67.19, Occidental’s closing stock price on the grant date. The grant date fair value of the TSR award is calculated based on a Monte-Carlo valuation on the date of grant, determined under Financial Accounting Standards Board Accounting Standard Codification Topic 718 (FASB ASC 718). See Note 14 to the Consolidated Financial Statements in Occidental’s Annual Report on Form 10-K regarding assumptions underlying the valuation of the TSR award. The maximum values of the TSR award as of the grant date for Ms. Hollub, Mr. Lowe, Ms. Backus, Mr. Burgher and Mr. Brown were approximately $10.8 million, $2.8 million, $2.4 million, $2.7 million and $3.0 million, respectively. The maximum values of the CROCE award as of the grant date for Ms. Hollub, Mr. Lowe, Ms. Backus and Mr. Burgher were approximately $5.3 million, $1.4 million, $1.2 million and $1.4 million, respectively. As discussed in the CD&A, the 2018 and 2019 CROCE awards for the named executive officers, other than Mr. Brown, who did not receive the CROCE awards, were amended and settled in early 2020, see “Compensation Discussion and Analysis – Elements of the 2019 Compensation Program – Long-Term Incentive Award Program – Cash Return on Capital Employed (CROCE) Award” on page 46. The RSU award has no above-target payout scenario.

(4)

For 2019, amounts shown represent the portion of the annual cash incentive award earned pursuant to the company performance portion for the pre-acquisition period and for individual performance (excluding the portion attributable to the company performance portion for the post-acquisition period, which is shown in the “Bonus” column). For Ms. Hollub and Messrs. Brown and Burgher, the Compensation Committee determined to settle a significant portion of the annual cash incentive award in time-vesting RSUs in lieu of cash. The “Non-Equity Incentive Plan Compensation” amount shown includes RSUs with a grant date fair value of $1,265,625 for Ms. Hollub; $450,000 for Mr. Brown; and $375,000 for Mr. Burgher. For more information regarding the 2019 annual cash incentive award, see “Compensation Discussion and Analysis – Elements of the 2019 Compensation Program – Annual Cash Incentive” beginning on page 41.

(5)

The following table shows “All Other Compensation” amounts for 2019 for the named executive officers. In accordance with SEC rules, benefits that are generally available to all full-time salaried U.S. dollar employees, such as medical, dental, life insurance, health savings, and flexible spending accounts, are not shown.

        V. Hollub         E. Lowe         M. Backus         C. Burgher         O. Brown
Savings Plan(a) $ 19,600 $ 19,600     $ 19,600     $ 19,600    $ 10,080
SRP II(b) $ 567,779 $ 214,620 $ 256,914 $ 270,877 $ 318,477
Personal Benefits $ 28,914 (c) $ 16,834 (d) $ $ $
Total $ 616,293 $ 251,054 $ 276,514 $ 290,477 $ 328,557
(a) Occidental’s contribution to the Occidental Petroleum Corporation Savings Plan (Savings Plan) described on page 48.
(b) Occidental’s contribution to the Supplemental Retirement Plan II (SRP II) described on page 48.
(c) Financial and tax planning, excess liability insurance and use of a car service for business travel for efficiency and security purposes.
(d) Financial and tax planning, excess liability insurance and annual physical.
(6) Amounts shown are intended to illustrate the pay-for-performance nature of the executive compensation program by presenting the realizable pay of the 2017, 2018 and 2019 compensation programs for the named executive officers as of March 24, 2020. The amounts reported in this column differ substantially from the amounts reported in the Total column required under SEC rules and are not a substitute for total compensation. See “Supplemental Summary Compensation Table” on page 35 for more information regarding the calculation of “Realizable Total Compensation” for each named executive officer.
(7) Mr. Burgher transitioned to another role within Occidental on April 3, 2020; Mr. Brown’s employment with Occidental ended in March 2020.

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Executive Compensation Tables

Grants of Plan-Based Awards

The table below shows the plan-based awards granted by the Compensation Committee to the named executive officers in 2019. For a summary of the key terms of the awards granted pursuant to the 2019 long-term incentive program, see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program” beginning on page 45. For the actual amounts earned under the annual cash incentive award, see the “Bonus” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table on page 56.

Grants of Plan-Based Awards

Name/Type of Award Grant
Date
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(1)
Estimated Future Payouts Under
Equity Incentive Plan Awards
All Other
Stock Awards:
# of Shares of
Stock or Units
Grant Date
Fair Value
of Stock
Awards ($)
      Threshold
$
   Target
$
   Maximum
$
   Threshold
# Shares
   Target
# Shares
   Maximum
# Shares
     
V. Hollub
ACI          $ 0 $ 2,025,000 $ 4,050,000
CROCE(2) 02/15/19 9,767 39,069 78,138 $ 2,625,046
RSU(3) 02/15/19 46,882 $ 3,150,002
TSR(4) 02/15/19 20,118 80,471 160,942 $ 4,725,043
E. Lowe
ACI $ 0 $ 750,000 $ 1,500,000
CROCE(2) 02/15/19 2,605 10,419 20,838 $ 700,053
RSU(3) 02/15/19 23,441 $ 1,575,001
TSR(4) 02/15/19 5,216 20,863 41,726 $ 1,225,020
M. Backus
ACI $ 0 $ 800,000 $ 1,600,000
CROCE(2) 02/15/19 2,233 8,930 17,860 $ 600,007
RSU(3) 02/15/19 20,093 $ 1,350,049
TSR(4) 02/15/19 4,471 17,883 35,766 $ 1,050,042
C. Burgher
ACI $ 0 $ 1,000,000 $ 2,000,000
CROCE(2) 02/15/19 2,530 10,121 20,242 $ 680,030
RSU(3) 02/15/19 22,772 $ 1,530,051
TSR(4) 02/15/19 5,067 20,267 40,534 $ 1,190,024
O. Brown
ACI $ 0 $ 1,200,000 $ 2,400,000
RSU(3) 02/15/19 19,349 $ 1,300,059
TSR(4) 02/15/19 5,535 22,140 44,280 $ 1,300,002
(1) Amounts shown reflect the possible payout range of the 2019 annual cash incentive award (ACI) at grant. For the actual amounts earned pursuant to the annual cash incentive award, see the “Non-Equity Incentive Plan Compensation” and “Bonus” columns of the Summary Compensation Table on page 56. The annual cash incentive award is described further under “Elements of the 2019 Compensation Program – Annual Cash Incentive” on page 41.
(2)

The grant date fair value of the CROCE award is equal to the target number of PSUs originally granted multiplied by $67.19, the closing price of Occidental’s common stock on the grant date. As discussed in the CD&A, the CROCE awards were amended and settled in early 2020. For more information, please see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program – Cash Return on Capital Employed (CROCE) Award” on page 46.

(3)

The grant date fair value of the RSU award is equal to the number of RSUs granted multiplied by $67.19, the closing price of Occidental’s common stock on the grant date. The RSU award vests ratably over three years with one-third vesting on each of February 28, 2020, 2021 and 2022, subject to continued employment, and is payable in shares of common stock upon vesting. The vested shares are subject to a two-year holding period. The value of the RSU award at vesting will depend on the closing price of Occidental’s common stock on each vesting date. For more information regarding the RSU award, see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program – Restricted Stock Unit (RSU) Award” on page 47.

(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 a range from 25% to 200% of the target number of PSUs granted based on Occidental’s TSR at the end of the three-year performance period as compared to the TSR of the performance peer companies, and whether Occidental’s absolute TSR value for the performance period is positive. For more information regarding the payout possibilities of the TSR award, please see “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program – Total Shareholder Return (TSR) Award” on page 45.

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Executive Compensation Tables

Outstanding Equity Awards

The table below sets forth the outstanding equity awards held by the named executive officers as of December 31, 2019.

Outstanding Equity Awards at December 31, 2019

Option Awards 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
($)
  Option
Expiration
Date
  Number
of Shares
or Units of
Stock that
Have Not
Vested
(#)
  Market Value of
Shares or Units
of Stock that
Have Not Vested
(#)(1)
  Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights that Have
Not Vested
(#)
  Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares,
Units or Other Rights
that Have Not Vested
($)(1)
V. Hollub
NQSO(2) 02/11/15 85,000 0  $ 79.98 2/11/2022
RSU(3) 02/15/17 12,647        $ 521,183
RSU(3) 02/07/18 27,194 $ 1,120,665
RSU(3) 02/15/19 46,882 $ 1,932,007
RSI(4) 07/22/13 4,470             $   184,209
RSI(4) 07/09/14 13,955 $ 575,086
CROCE(5) 02/07/18 8,498 $ 350,203
CROCE(5) 02/15/19 9,768 $ 402,539
PRI(6) 07/08/15 8,616 $ 355,065
TSR(7) 02/07/18 16,011 $ 659,813
TSR(7) 02/15/19 20,118 $ 829,063
E. Lowe
NQSO(2) 02/11/15 20,000 0 $ 79.98 2/11/2022
RSU(3) 02/15/17 7,811 $ 321,891
RSU(3) 02/07/18 15,028 $ 619,304
RSU(3) 02/15/19 23,441 $ 966,004
RSI(4) 07/22/13 15,469 $ 637,477
RSI(4) 07/09/14 13,955 $ 575,086
CROCE(5) 02/07/18 2,505 $ 103,231
CROCE(5) 02/15/19 2,605 $ 107,352
PRI(6) 07/08/15 6,893 $ 284,061
TSR(7) 02/07/18 4,588 $ 189,071
TSR(7) 02/15/19 5,216 $ 214,951
M. Backus
NQSO(2) 02/11/15 20,000 0 $ 79.98 2/11/2022
RSU(3) 02/15/17 6,695 $ 275,901
RSU(3) 02/07/18 12,881 $ 530,826
RSU(3) 02/15/19 20,093 $ 828,033
RSI(4) 10/01/13 20,096 $ 828,156
RSI(4) 07/09/14 6,203 $ 255,626
CROCE(5) 02/07/18 2,147 $ 88,478
CROCE(5) 02/15/19 2,233 $ 92,022
PRI(6) 07/08/15 3,792 $ 156,268
TSR(7) 02/07/18 3,933 $ 162,079
TSR(7) 02/15/19 4,471 $ 184,250

58     Occidental Petroleum Corporation


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Executive Compensation Tables

Option Awards 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
($)
  Option
Expiration
Date
  Number
of Shares
or Units of
Stock that
Have Not
Vested
(#)
  Market Value of
Shares or Units
of Stock that
Have Not Vested
(#)(1)
  Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights that Have
Not Vested
(#)
  Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares,
Units or Other Rights
that Have Not Vested
($)(1)
C. Burgher                     
RSU(3) 05/31/17 14,141 582,751
RSU(3) 02/07/18 12,881 $ 530,826

RSU(3)

02/15/19 22,772 $ 938,434
CROCE(5) 02/07/18 2,147 88,478
CROCE(5) 02/15/19 2,531 $ 104,303
TSR(7) 02/07/18 3,933 $ 162,079
TSR(7) 02/15/19 5,067 $ 208,811
O. Brown
RSU(3) 02/15/17 3,720 $ 153,301
RSU(3) 02/07/18 10,496 $ 432,540
RSU(3) 02/15/19 19,349 $ 797,372
TSR(7) 02/07/18 4,120 $ 169,785
TSR(7) 02/15/19 5,535 $ 228,097
PhSUs(8) 09/28/18 4,259 $ 175,513
(1) The dollar amounts shown represent the product of the number of shares or units shown in the column immediately to the left and $41.21, the closing price of Occidental’s common stock on the NYSE on December 31, 2019.
(2) The non-qualified stock option (NQSO) award vested ratably over a three-year period with one-third becoming exercisable on each of February 11, 2016, 2017, and 2018. The closing price of Occidental’s common stock on the NYSE on December 31, 2019 ($41.21) was not in excess of the strike price of the NQSO award.
(3) The RSU awards vest ratably over a three-year period, subject to continued employment. The unvested portion of the RSU award granted in February 2017 vested on February 28, 2020; one-third of the RSU award granted in February 2018 vested on February 28, 2020, and the remaining unvested portion will vest on February 28, 2021; and one-third of the RSU award granted in February 2019 vested on February 28, 2020 and the remaining unvested portion will vest ratably on February 28, 2021 and 2022. The unvested portion of Mr. Burgher’s sign-on RSU award granted in May 2017 will vest on May 30, 2020.
(4) Pursuant to SEC rules, values shown for the restricted stock incentive (RSI) awards assume that the RSI awards will pay out; however, based on the performance of Occidental through December 31, 2019, each of the 2013 and 2014 RSI awards are not expected to pay out. The shares underlying the RSI awards granted in 2013 and 2014 are forfeitable until the certification by the Compensation Committee that the performance goal is met, which must be satisfied no later than June 30, 2020 and 2021, respectively. If the performance goal is not achieved, then the shares underlying the award will forfeit. The ultimate payout may be less or more than the amounts shown, with the possibility of no payout, depending on the outcome of the performance criteria and the value of Occidental’s common stock on the award certification date.
(5) Pursuant to SEC rules, values shown for the CROCE awards granted in 2018 and 2019 reflect an estimated payout at threshold. As discussed under “Elements of the 2019 Compensation Program – Long-Term Incentive Award Program – Cash Return on Capital Employed (CROCE) Award” on page 46, the 2018 and 2019 CROCE awards were amended and settled in February of 2020. Ms. Hollub, Mr. Lowe, Ms. Backus and Mr. Burgher received 33,992, 10,019, 8,588, and 8,588 shares, respectively, with respect to the 2018 CROCE award, and 8,678, 2,315, 1,984 and 2,248 shares, respectively, with respect to the 2019 CROCE award.
(6) The performance retention incentive (PRI) award vests in four equal annual tranches, subject to continued employment through the applicable vesting date. The first tranche of the PRI award is still outstanding. Pursuant to SEC rules, the values shown assume that the first tranche of the award will pay out; however, the first tranche of the PRI award is not expected to pay out based on Occidental’s performance through December 31, 2019. If the performance goal underlying the first tranche of the PRI award is not met by June 30, 2022, the shares will forfeit. The ultimate payout may be less or more than the amounts shown, with the possibility of no payout, depending on the outcome of the performance criteria and the value of Occidental’s common stock on the award certification date.
(7) Pursuant to SEC rules, the values shown for the 2018 and 2019 TSR awards reflect an estimated payout at the threshold performance level; however, based on Occidental’s performance through December 31, 2019, the 2018 and 2019 TSR awards are not expected to pay out. The TSR awards vest based on the achievement of the applicable performance goal over the performance period. The performance periods for the 2018 and 2019 TSR awards end on December 31, 2020 and December 31, 2021, respectively. The ultimate payout may be less or more than the amounts shown, with the possibility of no payout, depending on the outcome of the performance criteria and the value of Occidental’s common stock on the award certification date.
(8) The phantom stock unit (PhSU) award vests ratably over a two-year period, subject to continued employment. One-half of the PhSU award granted in September 2018 vested on September 27, 2019, and the remaining unvested portion will vest on September 27, 2020.

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Executive Compensation Tables

Stock Vested in 2019

The following table summarizes, for the named executive officers, the stock awards vested during 2019. No option awards were exercised by the named executive officers in 2019.

Previously Granted Stock Awards Vested In 2019

Stock Awards
Name       Number
of Shares
Acquired on
Vesting
(#)
      Value Realized
on Vesting
($)(1)
V. Hollub 53,605   $ 3,258,645
E. Lowe 31,551 $ 1,878,847
M. Backus 27,785 $ 1,693,146
C. Burgher 20,582 $ 1,160,131
O. Brown 42,981 $ 2,187,788
(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 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, annual cash incentive award amounts and bonus 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. Each of the named executive officers is fully vested in his or her aggregate balance shown on page 61.

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.

Modified Deferred Compensation Plan

Under the Modified Deferred Compensation Plan (MDCP), the maximum amount of an executive officer’s salary or annual cash incentive award payment that may be deferred for any one year is limited to $150,000. A participant’s overall plan balance must be less than $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%.

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Executive Compensation Tables

The following table sets forth the 2019 contributions, earnings, withdrawals and balances under the SRP II and the MDCP, to the extent the named executive officers participated in such plans. The footnotes provide information about other amounts that were reported as earned in the Summary Compensation Table on page 56 for 2019 and prior years.

Nonqualified Deferred Compensation

Name Plan      Executive
Contributions
in 2019(1)
     Occidental
Contributions
in 2019(2)
     Aggregate
Earnings
in 2019
     Aggregate
Withdrawals/
Distributions
in 2019
     Aggregate
Balance at
12/31/19(3)
V. Hollub SRP II $—    $ 567,779   $ 93,843       $ $ 2,684,641
MDCP $— $ $ 14,028 $ 8,857 $ 359,207
E. Lowe SRP II $— $ 214,620 $ 90,874 $ $ 2,472,357
MDCP $— $ $ 43,249 $ $ 1,134,791
M. Backus SRP II $— $ 256,914 $ 40,118 $ $ 1,156,322
MDCP $— $ $ $ $
C. Burgher SRP II $— $ 270,877 $ 16,203 $ $ 535,723
MDCP $— $ $ $ $
O. Brown SRP II $— $ 318,477 $ 29,754 $ $ 891,943
MDCP $— $ $ $ $

(1)

No employee contributions are permitted to the SRP II.

(2)

Amounts represent Occidental’s 2019 contributions to the SRP II and MDCP, which are reported under “All Other Compensation” in the Summary Compensation Table on page 56.

(3)

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, 2019, of the contributions to the named executive officer’s account, earnings on those contributions, and any withdrawals or distributions since the named executive officer began participating in the plan. We previously reported Occidental contributions for the named executive officers in the Summary Compensation Table for fiscal years prior to 2019 in the following aggregate amounts: Ms. Hollub – $1,390,232; Mr. Lowe – $1,680,484; Ms. Backus – $651,029; and Mr. Burgher – $241,104.

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, 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 incentive pay, unless the grant of such benefits is approved by a vote of Occidental’s shareholders. The complete Golden Parachute Policy is available at www.oxy.com.

Outstanding Equity Awards. Awards granted to the named executive officers since 2015 (those granted under the 2015 LTIP) 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 62.

Potential Payments

In the table that follows, payments and other benefits provided to the 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, 2019, when the closing price of Occidental’s common stock was $41.21. The amounts shown 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 vacation up to a maximum accrual ceiling of 296 hours, and disability benefits, among others.

2020 Proxy Statement      61


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Executive Compensation Tables

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 a change in control event, Occidental’s ultimate achievement of performance goals underlying performance 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.

 
 

While amounts are expressed as an estimated cash value, all of the amounts reported, other than the phantom stock unit (PhSU) award held by Mr. Brown, are payable solely in shares of common stock, if at all. In addition, in circumstances of retirement, disability, death, or termination without cause, payout of performance-based awards is not accelerated, as such awards will not pay out unless and until the performance goal is achieved.

Potential Payments

Name/Type of Award (1)       Retirement
with Occidental
Consent
      Disability, Death
or Termination
without Cause
      Change in
Control
      Change in
Control and
Qualifying
Termination(8)
V. Hollub
RSI Awards(2)     $     $ $ 759,294 $ 759,294
RSU Awards(3) $ 1,718,663 $ 1,718,663 $ $ 1,718,663
CROCE Awards(4) $ $ $ $ 3,010,844
PRI Award(5) $ $ $ 355,065 $ 355,065
TSR Awards(6) $ $ $ $ 10,307,940
Total $ 1,718,663 $ 1,718,663 $ 1,114,360 $ 16,151,806
E.Lowe
RSI Awards(2) $ $ $ 1,212,563 $ 1,212,563
RSU Awards(3) $ 953,476 $ 953,476 $ $ 953,476
CROCE Awards(4) $ $ $ $ 842,250
PRI Award(5) $ $ $ 284,061 $ 284,061
TSR Awards(6) $ $ $ $ 3,024,237
Total $ 953,476 $ 953,476 $ 1,496,624 $ 6,316,586
M. Backus
RSI Awards(2) $ $ $ 1,083,782 $ 1,083,782
RSU Awards(3) $ 817,277 $ 817,277 $ $ 817,277
CROCE Awards(4) $ $ $ $ 721,917
PRI Award(5) $ $ $ 156,268 $ 156,268
TSR Awards(6) $ $ $ $ 2,592,233
Total $ 817,277 $ 817,277 $ 1,240,050 $ 5,371,476
C. Burgher
RSU Awards(3) $ 1,089,510 $ 1,089,510 $ $ 1,089,510
CROCE Awards(4) $ $ $ $ 770,998
TSR Awards(6) $ $ $ $ 1,483,436
Total $ 1,089,510 $ 1,089,510 $ $ 3,343,944
O. Brown
RSU Awards(3) $ 632,532 $ 632,532 $ $ 632,532
TSR Awards(6) $ $ $ $ 2,140,159
PhSU Award(7) $ 110,484 $ 110,484 $ $ 110,484
Total $ 743,016 $ 743,016 $ $ 2,883,175

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Executive Compensation Tables

(1)

The treatment of outstanding equity awards in connection with each termination scenario specified in these tables is summarized in the chart below:

Type of
Award
Retirement with
Occidental Consent
Disability, Death or Termination
without Cause
Change in Control Change in Control and
Qualifying Termination
RSI Award vests on a pro-rata basis, subject to actual performance. Award vests on a pro-rata basis, subject to actual performance. Award becomes nonforfeitable. Award becomes nonforfeitable.
         RSU
PhSU
Award vests on a pro-rata basis. Award vests on a pro-rata basis. No effect. Award vests on a pro-rata basis.
PRI Award vests on a pro-rata basis, subject to actual performance. Award vests on a pro-rata basis, subject to actual performance. Award is converted into restricted shares, subject to continued service vesting. Award vests at the target level, unless determined otherwise by the Compensation Committee.
CROCE
TSR
Award vests on a pro-rata basis, subject to actual performance; if retirement occurs on or after the 12-month anniversary of the grant date, the award vests in full, subject to actual performance. Award vests on a pro-rata basis, subject to actual performance. Award is converted into restricted shares at target level, subject to continued service vesting. Award vests at the target level, unless determined otherwise by the Compensation Committee.

(2)

The dollar amount shown represents the value realized upon the vesting of the RSI awards upon the achievement and certification of the underlying performance goal, 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. No payout of the RSI awards is shown in connection with the grantee’s retirement, disability, death or termination without cause because the underlying performance goals are not expected to be achieved based on Occidental’s performance through December 31, 2019.

(3)

The dollar amount shown represents the value realized upon the pro-rata 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.

(4)

In the case of the grantee’s retirement, disability, death or termination without cause, the dollar amount shown represents the value realized upon the pro-rata vesting of the CROCE award, 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 award. Shares that vest in connection with these termination scenarios remain subject to the attainment of the applicable performance goal, which have been shown at threshold levels based on performance as of December 31, 2019. In the case of a change in control and qualifying termination, the dollar amount shown represents the value realized upon the conversion of the CROCE award into vested restricted stock, which is equal to the product of the year-end closing stock price and the target number of shares underlying the award.

(5)

No payout amount is shown in the case of the grantee’s retirement, disability, death or termination without cause because the underlying performance goal of tranche 1 of the PRI award is not expected to be achieved based on Occidental’s performance through December 31, 2019. Tranches 2, 3 and 4 paid out in 2017, 2018 and 2019, respectively. In the case of a change in control, the dollar amount shown represents the value realized upon the conversion of tranche 1 of the PRI award into vested restricted stock (as the service vesting requirements for that tranche have been met), which is equal to the product of the year-end closing stock price and the number of shares underlying tranche 1 of the PRI award. In the case of a change in control and qualifying termination, the dollar amount shown represents the value realized upon the conversion of the PRI award into vested restricted stock, which is equal to the product of the year-end closing stock price and the number of shares underlying the unvested tranches of the PRI award.

(6)

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 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 applicable award. Shares that vest in connection with these termination scenarios remain subject to the attainment of the applicable performance goal, which has been estimated for purposes of this table based on the performance of Occidental as of December 31, 2019. In the case of a change in control and qualifying termination, the dollar amount shown represents the value realized upon the conversion of the TSR awards into vested restricted stock, which is equal to the product of the year-end closing stock price and the target number of shares underlying the applicable award.

(7)

The dollar amount shown represents the value realized upon the pro-rata vesting of the PhSU award 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 PhSUs that vest in accordance with the terms of the applicable award.

(8)

A “qualifying termination” means a termination by Occidental other than for “cause” or a termination by the named executive officer for “good reason” (in each case, as defined in the 2015 LTIP) within 12 months following the date of the Change in Control.

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PAY RATIO

                                                                                               
        

For 2019, the annual total compensation of the median compensated employee of Occidental was $185,259; the annual total compensation of Ms. Hollub for purposes of this pay ratio disclosure was $16,017,683; and the ratio of these amounts is approximately 86 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” (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.

Employee Population. We identified the median employee from Occidental’s employee population as of December 1, 2019. After excluding approximately (i) 3,814 employees acquired by Occidental in connection with the Anadarko acquisition and (ii) 355 employees pursuant to the de minimis exemption (as described below), Occidental’s employee population consisted of 6,967 employees located in the U.S.; 553 in Colombia; and 3,059 in Oman. Under the 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 10,934 as of December 1, 2019: Abu Dhabi (64); Belgium (3); Bolivia (65); Brazil (1); Canada (90); Chile (109); Hong Kong (4); Japan (2); Libya (1); Mexico (3); The Netherlands (1); Qatar (11); and Singapore (1).

Compensation Measure to Identify Median Employee. To identify the median employee, we used the annual salary of each employee as of December 1, 2019, plus any annual bonus paid to each employee during 2019, each as reported in Occidental’s payroll systems. We did not annualize the salary of any temporary employees.

Total Compensation in 2019. We calculated the median employee’s compensation for 2019 in accordance with the requirements of Item 402 of Regulation S-K, which is equal to the amount of the median employee’s compensation for 2019 that would have been reported in the Summary Compensation Table on page 56, plus the amount of the median employee’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 56, plus the amount of Ms. Hollub’s non-discriminatory health and welfare benefits.

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NON-EMPLOYEE DIRECTOR

      

COMPENSATION

                                                     
                    

The Governance Committee periodically reviews non-employee director compensation and makes recommendations regarding changes to the Board. The Governance Committee last reviewed non-employee director compensation in 2017 with the assistance of Meridian Partners, LLC (Meridian). 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 40) and against a broader comparator group of Fortune 250 companies based on market capitalization. Based on the market data presented by Meridian and the Governance Committee’s analysis, 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.

Recent Compensation Actions. Following the sudden and significant decline in global commodity prices in March 2020, the Board acted to reduce its own compensation, with immediate effect. The Board reduced all components of non-employee director compensation by 15% for the 2020-2021 term. For the 2019-2020 term, all remaining payments were also reduced by 15%.

Director Compensation Program

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; non-equity incentive awards; or retirement plans for non-employee directors. The independent Chairman of the Board, the independent Vice Chairman of the Board and the Committee 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 2019 non-employee director compensation program:

Compensation Element       2019 Annual Amount
Annual Cash Retainer $125,000 for non-employee directors
$155,000 for Chairman of the Board
Annual Equity Award $225,000 for non-employee directors
$275,000 for Vice Chairman of the Board
$335,000 for Chairman of the Board
Board or Committee Meeting Fees None
Committee Chair Additional Annual Equity Award $25,000 for each committee

Annual Equity Award

The Board believes that director and shareholder 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.

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Non-Employee Director Compensation

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. In 2019, the “All Other Compensation” amounts for certain non-employee directors included expenses related to spousal travel to attend an Occidental Board meeting and a tax gross-up related to spousal travel. Occidental reimburses non-employee directors for expenses related to their Board service, including hotel, airfare, ground transportation and meals.

Stock Ownership Guidelines

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 March 5, 2020, each of our non-employee directors was in compliance with these guidelines.

Director Compensation Table

The table below summarizes the total compensation for each of the non-employee directors in 2019.

Compensation of Directors

Name       Fees Earned or
Paid in Cash
      Stock
Awards(1)
      All Other
Compensation(2)
      Total
Spencer Abraham        $ 125,000 $ 225,022         $ 2,500 $ 352,522
Howard I. Atkins(3) $ 45,027 $ $ 35,241 $ 80,268
Eugene L. Batchelder $ 155,000 $ 335,042 $ 44,699 $ 534,741
John E. Feick(3) $ 45,027 $