Chesapeake Energy in a government filing this morning said CEO Aubrey McClendon's "departure from the company will be treated as a termination without cause under his employment agreement," a move that allows millions in payments. On Tuesday, the company announced McClendon would retire effective April 1. The easy part of figuring how much McClendon, who co-founded Chesapeake in 1989, will get when he leaves is his cash salary and bonus. The company said he's entitled to a base salary of $975,000 and annual bonus of $1.95 million for another four years. That's $2.925 million a year, or $11.7 million total, payable "in equal installments" as normal payroll, his employment contract says. After that it gets complicated, but Bloomberg News reported that McClendon is entitled to another $34 million "in accelerated vesting of restricted stock that he was awarded previously."
That raises the total compensation to $45.7 million. The Wall Street Journal estimated the value at "under $50 million." Both Bloomberg and The Wall Street Journal, citing unnamed sources, both reported that the company will not "claw back" any of the $75 million it granted McClendon in 2008 following a collapse in the company's share price that forced McClendon to sell nearly all his 33.5 million shares in Chesapeake. Bloomberg estimated that foregone value of the clawback at $11 million.
According to McClendon's employment agreement, termination with cause would have meant "the company will not have any obligation to provide any further payments or benefits to the executive after the effective date of such termination."
-- Jim Fuquay
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