Chesapeake CEO to take no bonus for 2012

01/08/2013 9:09 AM

01/08/2013 9:10 AM

Chesapeake Energy Corp. disclosed Monday that CEO Aubrey McClendon will not take a bonus for last year and that the company is limiting his use of corporate aircraft.

The oil and gas company stripped McClendon, its founder, of his chairman title in June after a series of corporate-governance issues upset investors. Those included a report that he took a personal loan from a company that was doing business with Chesapeake.

Chesapeake has also been struggling financially, due in part to a plunge in natural-gas prices. It has cut jobs, sold assets and disclosed in a regulatory filing Monday that it is substantially reducing its executives’ annual incentive compensation for 2012.

That includes McClendon going without a bonus, at his own recommendation. In 2011, he received a bonus of $1.95 million, unchanged from the previous two years.

The company also said that it is developing compensation plans for 2013 tied to performance.

Chesapeake’s board said it is cutting back on other executive perks. It is eliminating the personal use of the company aircraft by all executives other than McClendon, whose own allowable use of the aircraft was cut in half. He will have to reimburse the company for any costs over $250,000 a year. He was previously capped at $500,000.

The board, which includes five new members and the chairman who replaced McClendon, is trying to take tighter control of the company and allay investor fears.

It has hired an outside consultant to help identify ways to cut expenses. And it has reduced the company’s planned contributions for charitable, trade and political contributions.

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