Chesapeake defends bonus decision
Chesapeake Energy defended its decision to give a $75 million one-time bonus to its chief executive and sought to explain other deals the gas company has struck with the executive, including the purchase of a collection of his maps for $12.1 million, a regulatory filing today showed.
The bonus was first disclosed in January when Chesapeake's board renewed chief executive Aubrey McClendon's employment contract, but recent newspaper reports and the company's annual proxy statement have intensified scrutiny.
Chesapeake's directors said they gave the bonus to McClendon to recognise his "extraordinary contribution" to production deals struck during last year that added $10 billion in "intrinsic value" to the company, the filings said.
Chesapeake, led by McClendon, struck a number of billion-dollar production and acreage deals last year with companies including Norway's, raising valuable cash for the company, said a Reuters report.
But while the deals created value, Chesapeake stock investors did not have a great year.
The company's shares fell nearly 60% last year, underperforming a 35% drop in the American Stock Exchange index of natural gas companies.
In the latest SEC filing, the company also defends the $12.1 million purchase of a map collection that McClendon owned and the company's sponsorship of a National Basketball Association team, the Oklahoma City Thunder, in which the executive has an interest.
In December, Chesapeake bought an extensive collection of antique historical maps of the American Southwest from McClendon for $12.1 million at cost, the filing said.
"These maps complement the interior design features of our campus buildings and contribute to our workplace culture," the filing said.
Chesapeake is due to report first-quarter earnings after the close of trading today.