Aubrey McClendon disgusts me...Boards of Directors have evolved into nothing more than rubber stamps
Let me begin by saying that I am against official limits on CEO pay, especially government mandated ones, but as a shareholder of Chesapeake Energy preferred stock the following news about the company's CEO Aubrey McClendon makes me absolutely sick...to the point that I may send a letter or e-mail to the Board of Directors that I am sure they will promptly throw in the garbage.
Chesapeake Energy CEO gets $112.5M pay in 2008
While he has no control over the price of natural gas, McClendon did nothing in 2008 to justify his a quadrupling in his compensation from the prior year. In 2007 he made $25.5 million as CEO of the company. That's nothing to sneeze at, but nothing compared to the total compensation of $112.5 million that he received in 2008...a year in which the company's profits were cut in half and the value of its stock declined by 58%. It is just me, or is that pretty darn annoying.
I'm sure that McClendon was trying to make back some of the $600 million that he pissed away when he was forced to sell virtually all of his stock in a massive margin call last year, but the fact that he's an idiot and levered up his personal portfolio like that should have no impact upon what he gets paid to do his job. How can the Board of Directors allow him to get away with this?
The guy was given a $75 million bonus on December 31st. I'll repeat that...$75 million bucks. For what?!?
Do Boards of Directors have any power any more or have the evolved into nothing more than a bunch of fat cats that collect pay and options for rubber stamping whatever management wants? The number of boards that have been found completely asleep at the wheel these days is absolutely astounding (see most major banks).
How can the board approve a quadrupling of McClendon's compensation? Were they afraid that he was going to leave. HA fat chance of that after he just lost most of his money. Even if he did want to go if I was on the board and was truly independent (an unlikely event) I would have told him "Good. Don't let the door hit your arse on the way out. I'm sure that there are a lot of trained chimps out there who will gladly preside over a halving of the company's stock price this year."
This is absolutely nuts. If the yields on the company's preferred stock weren't so juicy, my stake has risen by 20-something percent since I acquired it and it still yields 9%, I'd dump it out of principle. Of course, I'm for sale so I won't do that...but this whole thing is infuriating.