Advantages and Disadvantages on the OXY Human Resource Practices
There are committee known as Executive Compensation and Human Resources Committee (also call as
Compensation Committee) in Occidental Petroleum Corporation. This committee was controlling and
holding the job of doing research about the compensation amount, the compensation plan and writing
reports for the Corporation’s annual proxy statement or annual report.
This compensation committee who in charge of all executive officers of the Corporation do reviews then
approve the annual salaries, bonuses and other executive benefits of them. All the compensation of
each individual in the corporation was approved by the committee. To evaluate CEO performance, the
compensation committee do set an annual and long-term performance goals for the CEO, the evaluation
will do with the Lead Independent Director. In the same time, make some recommendations to the
Board with respect to incentive-compensation plans and equity-based plans. Besides that, compensation
committee will oversee the stock-based compensation plans of the Corporation from time to time, and
also make sure that the special rewards are attained only by exceptional performance.
An annual and long-term performance goal will be set by the compensation committee to the CEO to
evaluate their performance. Based on this practice, we can found out that performance of the CEO is it
match to their target, is it the performance of the CEO match with the amount of compensation
awarded. But it brings some disadvantages. Due to the pressure by the goal, CEO may put too much of
pressure to their followers, may leads to bad impression and anxiety on the followers, followers loyalty
decline.
Secondly, the compensation committee will make recommendation regarding to the incentive-
compensation plans and equity-based plans. There are advantages like enable to find out new and more
effective ways to compensate, to motivate employees, besides, by using new incentive-compensation
plans and equity-based plans employee will get updated pays, with that, could find out the most suitable
plan for employee. But a fault recommendation implement will leads to losses of corporation or
dissatisfied of changes by the employees.
4.0 Recommendation & Suggestion for executive compensation
4.1 Recommendation of executive compensation based on disadvantage
4.2 Suggestion for executive compensation
There are several suggestions for company wish to implement executive compensation.
First of all, the company can select an appropriate peer group for compensation benchmarking. Many
companies set pay levels relative to a chosen comparator group of industry peers. The most important
aspect of peer group benchmarking is to ensure the company have their peer group rights. Once they
