Ray Irani is forced out of Occidental Petroleum*

Looks like investors finally decided enough was enough. Irani, who at times ran the L.A.-based energy company as if it were his private fiefdom, was unceremoniously voted out of his longtime board seat. This is a huge development in the efforts by shareholder groups to empower investors. For years Irani had been a poster boy for bad corporate behavior, mostly for his exorbitant pay (his compensation package totaled $857 million over a 10-year period). Even when the board nudged him out of the CEO spot in 2011, he remained chairman and got paid more than his successor, Steve Chazen. His ultimate undoing came early in the year when he tried pushing out Chazen, according to the WSJ. Several large shareholders objected to the scheme, but there was little hint that Irani was in danger of actually losing his job. Irani, who is 78, already had been scheduled to retire in 2014, which is why his not being reelected for one last year is such a slap in the face. Let it be said that Irani, who became CEO in 1990, played an enormous role in expanding what had been an also-ran oil and gas company into a major energy player. If only the guy had been able to keep his ego in check. Also not reelected was director Aziz Syriani, who had been close to Irani. From the WSJ:

Mr. Irani's apparent defeat "is a pretty amazing thing. It happens very rarely, particularly for a company of this size and reputation,'' said Charles Elson, head of the Weinberg Center for Corporate Governance at University of Delaware's business school. "It shows how far shareholder activism has come,'' added Mr. Elson, who is a board member at HealthSouth Corp. "The day of the management-dominated corporation may be on its way out, replaced by a much more balanced approach" that also reflects investor views, he said. Mr. Irani's departure would give Mr. Chazen the freedom to continue to pursue cost-cutting measures and perhaps a restructuring of the business, such as selling off assets, said Guy Baber, vice president of equity research at Houston-based investment bank Simmons & Co. "His departure signifies the end an era for Oxy," Mr. Baber said.

*NYT is reporting that Irani withdrew his name from consideration for a new term on the board.