From Gretchen Morgenson at the New York Times comes another story of corporate bonuses in a time of woe and want. This one's not about AIG, but about the $75 million bonus received by Chesapeake CEO Aubrey McClendon.
HERE’S a study in contrasts: While Congress whips up outrage over compensation at the American International Group, a shareholder at Chesapeake Energy, whose directors awarded a $75 million bonus to its chief executive even as the company’s stock plummeted, is doing what responsible owners should do: quietly and methodically demanding answers and accountability from directors who awarded the handsome payout...
The new deal came at the end of a brutal year for Mr. McClendon. Last October, after Chesapeake’s shares dropped because of falling natural gas prices, a margin call forced him to sell 94 percent of his shares in the company. At its peak, his Chesapeake stake was worth about $2 billion.
“Given that Chesapeake’s earnings dropped by half,” said Marc I. Gross, a senior partner of Pomerantz, Haudek, Block, Grossman & Gross, which represents the Louisiana retirement system, “the $75 million bonus appears not attributable to Mr. McClendon’s exemplary performance but rather to the extraordinary losses he sustained when his Chesapeake shares declined by 60 percent. As such, the bonus appears to be a C.E.O. bailout, while ordinary shareholders got stuck with their losses.”