Occidental Agrees to Pay Irani $14 Million to Settle Termination

Occidental Petroleum Corp., the largest oil producer in the contiguous U.S., agreed to pay former Chairman Ray Irani $14 million as part of a settlement for his separation from the company.

Irani, 78, who shareholders ejected from the board in a vote at their annual meeting in May, will continue receiving lifetime security and tax-preparation services estimated at as much as $1.3 million a year, Los Angeles-based Occidental said today in a federal filing. The total pretax cost of the settlement is estimated at $26 million plus as much as $1.3 million in annual costs, according to the filing.

The best paid oil industry CEO in 2009 received average annual compensation of almost $80 million since 2001, according to data compiled by Bloomberg. Irani, who joined the company in 1983, earned more than $45.6 million last year after he gave up the CEO role. Investors rebelled against the board’s surprise decision in February to replace CEO Stephen I. Chazen, concerned that Irani had been a driving force behind the plan.

“Dr. Irani has maintained that the company effectively terminated him under the terms of his 2008 employment agreement, thereby entitling him to a termination payment and other benefits and perquisites under that agreement,” the company said in the filing.