The chairman of Occidental Petroleum Corp., who drew criticism over his compensation as CEO, is out.
Ray R. Irani will step down and be replaced by a former diplomat, Occidental announced Friday after its annual meeting. Shareholders cast their shares against him by more than a 3-to-1 margin.
Irani was chairman and CEO from 1990 to 2011 and became executive chairman in May 2011.
The company said that another director, Aziz Syriani, withdrew before the election at the company's annual meeting.
Occidental said that Edward P. Djerejian, a former U.S. ambassador to Israel and Syria, will replace Irani. Former U.S. Energy Secretary Spencer Abraham will become vice chairman.
Irani, 78, has come under fire by shareholders for his compensation. An analysis by The Associated Press found that in 2010, he was the second-highest-paid CEO among Standard & Poor's 500 companies, with a package of salary, stock awards and other compensation valued at $76.1 million, up 142 percent from the year before.
Big shareholders including the California State Teachers' Retirement System called his compensation a waste of shareholder money.
The Los Angeles-based oil and gas producer defended the compensation, saying it was tied to Occidental's performance. The company's net income jumped 55 percent to $4.53 billion in 2010. Under Irani's leadership, Occidental grew to become the fourth-largest U.S.-based oil company. Its stock market value was $9 billion in 2000 and is $73 billion now.
Irani had planned to retire at the end of 2014.
Occidental said Friday that CEO Stephen Chazen and the board would call Irani for what the company termed "advice, counsel, and help in advancing the company's business interests." Chazen thanked Irani for 30 years of service to Occidental.
In February, Occidental announced that it would start looking for a replacement for Chazen. Last month the company said that its independent directors believed that "now is the time to seek new leadership to be in place for the longer term."
Last week Occidental announced that Chazen would remain CEO through next year and help in the search for his successor.
The new chairman, Djerejian, has been on the Oxy board since 1996. He is a founding director of the James A. Baker III Institute for Public Policy at Rice University.
Abraham, who was elected to the Senate from Michigan and was Energy Secretary under President George W. Bush, has been an Oxy director since 2005 and chaired the executive compensation committee. He runs a strategic consulting firm.
In April the company quoted Abraham as saying that Occidental was "committed to revising its executive compensation program to reflect shareholder feedback" and align it with pay at peers.
Occidental shares rose $2.67, or 3 percent, to close at $90.76.