Chesapeake under fire from shareholders over CEO pay

OIL AND GAS: Chesapeake under fire from shareholders over CEO pay (Tuesday, April 28, 2009)

Chesapeake Energy Corp. shareholders are blasting the company and its directors for paying CEO Aubrey McClendon $112 million last year even as the company’s stock price plummeted.

Aubrey’s compensation package was one of the largest for any corporate executive last year and included a one-time $75 million bonus on top of a $975,000 base salary and $32.7 million in stock, according to the company’s proxy statement.

The documents also disclose several transactions between Chesapeake and McClendon or companies in which he has an interest, including a $12.1 million deal to buy his collection of maps and artwork.

“I have never seen a more shameful document than the Chesapeake proxy statement,” investor Jeffrey Bronchick said in a letter to Chesapeake’s board. “If I could reduce it to one page, I would frame and hang it on my office wall as a near perfect illustration of the complete collapse of appropriate corporate governance.”

McClendon and Chesapeake declined to comment, and directors did not return calls seeking comment. McClendon’s new five-year contract and other bonus were a reward for negotiating a series of multibillion-dollar asset sales and to keep him from pursing “other entrepreneurial opportunities,” the company said in the proxy and other filings (Ben Casselman, Wall Street Journal [subscription required], April 28). — TL