Occidental Petroleum Corp.'s board on Thursday unanimously approved the choice of President Ray R. Irani to succeed 91-year-old Chairman and Chief Executive Armand Hammer, believed to be the first time the board has placed its imprimatur on a Hammer successor.
But the vote of confidence in Irani, 55, doesn't signal Hammer's intentions to step down soon. The controversial oilman "continues to be in very good health and plans to continue to serve as chairman and chief executive officer for the indefinite future," the announcement said.
With the vote, Irani gains a virtual lock on the top job of the Los Angeles-based chemical and oil company, and analysts saw that as a way to ensure an orderly transition and to calm a nervous stock market.
Nervous investors typically send Oxy's stock jumping any time Hammer has a physical problem, fearing a management gap in the event of his death that would leave the company vulnerable to takeover.
Just last November, Oxy's stock jumped $3 per share after Hammer was hospitalized for implantation of a pacemaker. It slumped back $2 after Hammer appeared to recover. After Thursday's announcement, Occidental's stock closed up 87 1/2 cents at $28.25 a share in trading on the New York Stock Exchange.
The stock's skittishness hasn't been helped by the stream of presumed heirs who have passed through Occidental's executive suites. They include former presidents A. Robert Abboud and Joseph Baird, who eventually fell out of favor and left the company after disagreements with Hammer.
"One always had the question in the back of the mind that the position (of president) was a revolving door," said Craig Schwerdt, an analyst with Seidler Amdec Securities in Los Angeles.
Irani's selection did not surprise most observers. As Oxy's chief operating officer, he has been running many of Occidental's day-to-day operations anyway and has filled in for Hammer at public functions in the past.
Unlike Hammer, Irani is characterized as "a motivator" and "politically savvy."