Today’s Wall Street Journal reports that two prominent investors—Relational Investors and CalSTRS—will seek to replace up to four members of Occidental Petroleum’s board in 2011. Chair and CEO Ray Irani is grossly overcompensated. At 75, it is questionable that he is fit to be running a major corporation. The board has waived its own mandatory retirement age for him and two other board members.
It says much about the sorry state of corporate governance that this story is even news. With some 13,000 corporations holding annual meetings each year, there should be thousands of contested board elections. Instead, the SEC maintains such onerous proxy rules that contested board elections are rare—so rare that the few occurrences warrant coverage by the national media.
Irani and his cronies aren’t the problem. Like canaries in a coal mine, they are a symptom.