Updated 10.09.2009
Summary: Our research reveals concerns around unreasonably high amount of transactions between the company and senior management. However, Board composition in terms of external committments of board members is better than most other companies.
Huge concerns around Compensation Practices. Also there are unreasonably high dollar value transactions between Chesapeake Energy and other companies in which its CEO has ownership interests. Limited social and environmental data make it difficult to determine the social and environmental impact of Chesapeake Energy.
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Is the Board exercising good compensation practices while determining senior management compensation?
The CEO and Chairman of the company, Aubrey McClendon has been in the news lately for his whopping $100 million compensation for 2008. The CFO was also recently granted a $9.6 million incentive award for 2008. During the same period, Chesapeake stock took a rather severe beating.
Chesapeake Energy does not have a Board level reserves committee to provide oversight and review of any statements or of any internal procedures used for gathering and disclosure of reserves. This is especially critical when you consider that cash bonuses paid to executive officers are based on operating and financial performance measurements of which reserves form an integral part.
Is the Board at Chesapeake Energy over extended?
One positive aspect of Chesapeake Energy might be its Board of Directors. The Board members at Chesapeake Energy do not hold a large number of multiple company directorships.
Does the company provide adequate details on its social and environmental impact?
The company provides limited current environmental and social impact metrics information.
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Board Size: 14 (as per 2008 Proxy Statement filed in March 2009.)
Board of Directors Compensation($): $55,000- Annual retainer; $15000 and $3500 for every Board Meeting attended personally and telephonically, respectively (not to exceed $110,000 for the year); An Annual grant of 12500 shares of restricted stock. 25% vests immediately and 75% over 3 years
Total greenhouse gas emissions: 2008- not known; 2007- not known
Total CEO compensation for 2008($): $100.07 million
