Occidental Petroleum cuts CEO, staff pay cuts enforced

To avoid being overwhelmed by the debt taken on to pay for its $38 billion acquisition of rival Anadarko Petroleum, Occidental has pared spending on production, cut its shareholder dividend, dismissed staff and sold assets, according to Reuters.

Occidental Petroleum Corp will cut employee salaries by up to 30 per cent, according to an internal memo reviewed by Reuters, as oil producer tries to save cash amid tumbling energy prices.

The Anadarko deal has proved to be an ill-timed bet on rising oil prices that soured within months of the deal’s closing. 

Melissa Schoeb, a company spokesperson, said: “During this unprecedented time impacting our industry, and the global economy, we’re taking aggressive actions to ensure the health of the company while protecting jobs.”

She added: “We notified our employees of a number of measures we will be implementing, including compensation reductions, which will impact everyone at the company starting with the management team.”

Occidental will cut the salaries for some US employees who earn more than $76,000 a year by up to 30 per cent as of April 1, according to the memo and employee comments on website thelayoff.com discussing the salary cuts.

The pay of Chief Executive Vicki Hollub, who championed the Anadarko acquisition and convinced Berkshire Hathaway Chairman Warren Buffett to invest $10 billion in the deal, will fall 81 per cent. Salaries of other top executives will be reduced by an average of 68 per cent, the memo said.

Some workers who joined the company from Anadarko and are protected by terms of the acquisition agreement, will see their salaries lowered by 4.9 per cent.

The reductions follow two cuts to its 2020 capital budget and an 86 per cent reduction in its shareholder payout. After those cuts, the company said it would be able to cover its expenses with oil in the low-$30 a barrel range.

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30th March 2020