Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Dan Roberts discuss the details of Occidental’s latest pay cut.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back to "Yahoo Finance Live" where we continue to broadcast to you from our living rooms. Thank you so much for being with us. We know that oil companies have been taking a big beating as the price of oil continues to tumble along with a lot of other investment assets.

And we received news today that Occidental Petroleum is going to cut its CapEx plans for 2020 even further to $2.7 billion from $2.9 billion. It's also going to cut pay for some employees, and that includes senior executives. For more on this, I want to bring in Brian Sozzi. Brian, what jumped out to you in this report?

BRIAN SOZZI: Yeah, this comes via the "Wall Street Journal," and I'm not surprised by this by any stretch of the imagination. So the employees will get their expenses slashed by 30%. CEO Vicki Hollub, [INAUDIBLE] off the hot seat, will see her pay slashed by 81%. And to that, I would say good.

Hollub and her board last year signed off on the $38 billion deal for Anadarko [AUDIO OUT] deal. And you look at Carl Icahn, has a 9.9% stake in Occidental Petroleum, and all his concerns that he's been bringing to the fore over the past two months regarding Hollub's leadership and the [AUDIO OUT] seem to be spot on here. To spend that type of money, and essentially in a low oil price environment was just not a smart move. I wouldn't be surprised if you wouldn't see pay cuts elsewhere in the industry but not to the extent, I think, you're seeing at Occidental Petroleum. This remains a very Occidental Petroleum related issue-- too much debt, terribly timed acquisition.

ALEXIS CHRISTOFOROUS: Yeah, I think a lot of that is unique to Occidental. But, Dan, as we were just talking a minute ago about the retailers, do you think that we're going to see more energy producers have to do the same things that Occidental is doing just to survive?

DAN ROBERTS: Yeah. Absolutely, Alexis. I think with this story, there's two things at play. First of all, there's an activist investor. The "Journal" reporting that Occidental has come to a deal with Carl Icahn. Sometimes when you see that happen, you see the stock go up. Of course, right now Occidental shares are down. But sometimes the thinking is, OK, if they're now going to have an activist investor coming in, that person is going to cut the fat.

Now, of course, right now you're dealing with coronavirus, which changes everything. And we have to think about the other story here is the larger oil market. And before everything kind of became stay at home and the entire US economy kind of ground to a halt because of coronavirus, we were reporting on the fact that oil prices were plummeting because of what was happening between Russia and Saudi Arabia. We know all the background here. And that was coronavirus related, but, really, a price war that started because demand was so low.

So we saw that just yesterday oil futures, gas price futures we're down to $0.50. That's on RBOB futures for the first time in more than 20 years. So, yes, this is the coronavirus story in terms of cutting staff. It's an activist investor story, which is Occidental specific. But it's also an oil industry story, and I think that a lot of these energy companies are really going to suffer in the short term. I mean, look how cheap oil prices are right now.

ALEXIS CHRISTOFOROUS: Yeah, exactly. All right. Dan Roberts, thanks for that.