Occidental Petroleum chief Vicki Hollub looks set to keep her job at the embattled oil producer days after Carl Icahn urged her sacking as the company is finalising a deal with the activist investor that would give him two seats on the board, said people briefed about the matter.
The truce between Occidental and the billionaire investor, who has been agitating the company’s board since he tried to block its $56bn takeover of Anadarko Petroleum last year, seeks to end months of public fighting and shift the focus to reviving the business’ fortunes.
As part of the deal being negotiated on Sunday, two close associates of the New York investor, Andrew Langham and Nicholas Graziano, will join the board of Occidental, those people said. An additional board member could be added, who will be selected jointly by Mr Icahn and the existing board, the person added.
Mr Icahn, who owns about 10 per cent of Occidental, had sought to remove four directors from the company’s board, and pushed for the company to sell itself. In response, Occidental’s board deployed a “poison pill” to prevent a hostile takeover orchestrated by Mr Icahn.
Occidental also announced that board chairman Eugene Batchelder would step down at this year’s board meeting. Late last week it emerged that Stephen Chazen, who was Occidental’s chief executive until 2016 and handpicked Ms Hollub as his replacement, would become the new chairman.
Mr Chazen was determined to put an end to the fight with Mr Icahn before taking on the role, said people informed about the matter. However, he was also adamant that Ms Hollub kept her job as part of the truce deal, those people added.
One person involved in the negotiations, which was first reported by the Wall Street Journal, warned that there had been a lot of back and forth between Mr Icahn and the company’s board and added that no final agreement had been reached. Any settlement would likely be announced on Monday after the markets close, the person added.
The collapse in oil prices, now less than half their price in early January, has affected the entire US oil sector — but hit Occidental, the US’s biggest domestic oil producer, especially hard.
The company slashed its dividend by 90 per cent earlier this month and sharply reduced planned spending for this year. Last week rating agency S&P downgraded $37bn of its debt to junk status, citing the high leverage Occidental has taken on since buying Anadarko for $56bn last summer.
Its share price has fallen almost 70 per cent in the past three weeks and its market capitalisation is now less than $10bn, compared with $42bn just before its deal to buy Anadarko in August 2019.