04 May. 2011 | Comments (0)
“Role of Investors and Stockholder Advisory Groups. Occidental maintains an ongoing dialogue with its stockholders and certain stockholder advisory groups. Occidental’s Lead Independent Director and the Chairman of the Compensation Committee participated in meetings with some of Occidental’s institutional investors in the summer and fall of 2010. Discussions at the meetings included, among other things, succession planning and selection of performance targets and peer companies and other compensation practices. Feedback obtained from the meetings was provided to the Compensation Committee and the full Board. Comments from investor meetings have been taken into consideration in Occidental’s ongoing efforts to improve its compensation program and the quality of its compensation disclosures.”The company’s actions haven’t been all virtuous. But it seems the board has been listening to some of its biggest shareholders following a settlement last year with California State Teachers’ Retirement System (CalSTRS) and Relational Investors LLC that called from concessions from the company on succession planning, executive compensation and the election of corporate governance expert Margaret “Peggy” Foran to the company’s board. (These institutional shareholders threatened to replace four board members if the company didn’t address corporate governance matters.) But like anything that brings change to a system like American corporate governance, there’s bound to be controversy. And the fifth analyst call has generated its share of that. Rob Berick, senior managing director of communications at Dix & Eaton, captures the essence of the Occidental call in his Street Talk blog post Monday. He points out that the investor relations/governance concept seemed to work on Monday. He wrote:
“The good news is that the sun did in fact rise the very next day so the feared apocalypse was averted. Granted, while the participants asked pointed questions, there weren't many curveballs thrown during the Q&A session. It would be foolish to assume such would be the case in every instance.”He also included a link to a white paper his firm wrote regarding the Occidental call, where the firm lists the pros and cons of the fifth analyst call. While the pros are a bit obvious, the cons point out some gray areas, such as whether or not Occidental violated Regulation FD (Fair Disclosure) when it held the call. The sticking point there is that Occidental supposedly did not publicly alert investors about the call and didn’t post a recording of the call on its web site. Dominic Jones, founder of IR Web Report, makes that case in his April 27 post. He also points out how the timing of the call should be questioned since it occurred less than 48 hours before the company released its first quarter 2011 earnings.