Bye-Bye Irani, Hello to This ETF

Sure, the volume is light (not yet a third a of the daily average), but the iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund

enjoying a nice end to the week with a Friday gain of nearly 2.6 percent. As an energy ETF, IEO is a prime beneficiary of the strong April jobs report delivered earlier today, but another catalyst is at work for the $316.2 million fund. IEO's largest holding, Occidental Petroluem

announced today that controversial Chairman and former chief executive officer will step down after shareholders withheld support for him at the California-based

. IEO allocates 13.07 percent of its weight to Occidental, the fourth-largest U.S. oil company, an allocation that is nearly 500 basis points larger than the ETF's second-largest holding, Anadarko Petroleum

. As was

, IEO and some other energy sector ETFs represent prudent avenues for accessing Occidental's potential-laden story. That story becomes all the more alluring with Irani gone because some institutional investors believed Irani was still running the show, blocking current CEO Steve Chazen from creating shareholder value by possibly spinning off Occidental's midstream/downstream operations. Irani had also drawn the ire of shareholders for years due to compensation levels that were well above the industry standard. Irani received nearly $46 million last year just to be chairman. For the five years through April 2010, Irani received a staggering $782.48 million in compensation,

. Bloomberg reported Irani

upon departure. A nice payday(s) to essentially do no work for Occidental, but shareholders can likely stomach those figures much easier than knowing Irani's five-year compensation through April 2010 ate up nearly a third of the company's current dividend obligation. As for IEO, the ETF has a P/E ratio of 25.25 and price-to-book ratio of 2.55,

. That means IEO is pricier than the Energy Select Sector SPDR

, which has a P/E of 12.53 and

. News of Irani's departure could be a sign that IEO is worth paying up for. Year-to-date, the ETF has outpaced XLE and the Vanguard Energy ETF

by an average of 150 basis points. Additionally, IEO could give investors some exposure to a potential downstream divestment by Occidental. It is not only important to note that the ETF is home to an ample amount of refining stocks, but which stocks call IEO home. IEO's two largest refiner holdings are Phillips 66

and Marathon Petroleum

, two spin-offs of ConocoPhillips

and Marathon Oil

. Those stocks combine for 12 percent of IEO's weight. For more on Occidental and ETFs, click

.