Aubrey's Bailout Package
Aubrey McClendon has as much gall as he has natural gas.
The CEO of Chesapeake Energy (CHK) -- who was forced to unload almost his entire equity stake in the company last October to meet a margin loan call -- was given a mammoth incentive award at the end of 2008 that raised his total compensation for the year to $112.5 million, according to the Associated Press.
McClendon's entire pay package was more than four times his prior year compensation of $25.5 million, despite net income at the company dropping by half in 2008 leading to a 58% decline in Chesapeake's stock price.The bulk of McClendon's colossal compensation came in the form of a $75 million incentive award granted on Dec. 31, according to data filed late Monday with the Securities and Exchange Commission. On top of the $75 million award, McClendon was paid $975,000 in salary last year and received a bonus of almost $2 million in July. His other compensation included $648,096 worth of personal use of company aircraft, $577,113 in company-paid accounting services and $438,750 in matching contributions to Chesapeake's retirement plan, says the AP. But of course the company says that's all performance based and has nothing to do with McClendon being forced to sell 31.5 million shares, worth nearly $600 million, last October to cover margin calls on his Chesapeake shares. Chesapeake stock fell from a June high of $74 to as low as $9.84 in early December. It now trades just below $20 a share. The company said in Monday's filing that McClendon's mind-boggling bonus reflects his role "in shaping the vision for the company and growing it into the largest independent producer of U.S. natural gas." We're sorry, but breathing in all that methane must have damaged their brains. McClendon pocketed plenty for helping build the company only to gamble it away. And the well of shareholder goodwill toward good old Aubrey has long since run dry. If Chesapeake wants to get into the business of bailing out over-indulgent execs, then they should open up a bank. If they want to make money drilling holes, then they should do it in the ground, not in investor's pockets. Dumb-o-meter score: 80 -- Aubrey's well ran dry. So his buddies on the board refilled it.
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