Chesapeake Business Practices

[MikeOKC]

The ISS's of the world are the reason why the financial sector is a complete mess, they are symptomatic of the typical short sightedness that the profit takers (they can no longer be called investors) focus on. It is pretty dang simple, if someone feels that CHK is a bad investment, don't put your money in there and eventually the stock prices will reflect that many people do but evidently most don't. All upper level management types get a ridiculous payday anymore, it isn't just McClendon or energy sector honchos, the worst of the worst are the financial sector upper management who keep granting themselves lavish packages when they lose billions.

I think the major point from analysts is that CHK was raked over the coals on the now infamous AM compensation package and all the board has done to correct it is - nothing. Did you read those articles? It's clear that very many people believe AM is still running CHK like it's a private company and has a board that's doing his personal bidding for compensation-stacking that is unacceptable at a public company. It's obviously very carefully skirting the law. Yes, you are right, there are a lot of ridiculous pay packages out there. But they aren't the issue. CHK and Aubrey McClendon are being singled out for a reason. "Horrible corporate governance" in the words of one. Having board directors making $577,000.00 a year is rightfully called "scandalous" for a reason. They're not going to buck you when you're on the board and controlling things like it's a private company and paying them those ludicrous pay days for - literally - a few days of work. I think CHK stockholders better listen. When that one writer quoted Zoolander, I'm afraid he's pretty damn close: "Keep pulling the sweater ... Eventually the thing will unravel." And frankly, Oklahoma City cannot afford problems at CHK with corporate cowboys putting not only CHK, but our city, at risk.

[MikeOKC]

Today - it's the Wall Street Journal

Chesapeake CEO Faces Storm

"Chesapeake Energy Corp., facing calls from an influential advisory firm to oust co-founder and Chief Executive Aubrey McClendon as chairman over executive pay issues, gave ground hours before its annual meeting.

Mr. McClendon has proved a controversial figure, at once admired for building the nation's second-largest natural-gas producer from scratch, but also criticized for appearing to flout normal standards of corporate governance regarding compensation. Unlike many executives in the country, Mr. McClendon's compensation is set solely at the nine-member board's discretion and hasn't been tied to stated performance standards.

Hours ahead of the annual meeting, Chesapeake on Thursday filed a statement with the U.S. Securities and Exchange Commission committing to implement an "executive compensation system that includes objective performance criteria," as recommended by an independent compensation consultant the company engaged in March. The company had eschewed tying compensation to such objective metrics as recently as April, according to regulatory filings."

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"Mr. McClendon has made more than $152 million in cash, stock and perquisites since 2008, according to federal filings, making him one of the nation's highest-paid chief executives in any industry."

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"Directors' pay for 2010 averaged above half a million dollars, including their personal use of corporate aircraft."

http://online.wsj.com/article/SB1000...181597036.html

A McClendon apologist is also quoted - there's few of them. Many of my friends here at OKCTalk don't realize this man's hubris has made him the poster boy for all that's wrong with corporate governance.