Exclusive: CEO's sales of well stakes raise questions at Chesapeake

Comments (7)
AlkalineState wrote:

McClendon argues that having a stake in the wells helps to align his interests with that of the company. But if this is such a good idea, why doesn’t Chesapeake do this for all employees? Incentivize the whole work force instead of just one boss. Instead, the employees are offered common stock like any other company. The same stock that McClendon just drove DOWN while profiting from his direct ownership stake in the company’s wells.

Chesapeake is a sell. This guy is running a Corzine scheme. You put money into this company, it’s going sraight to the CEO’s Cayman Islands bank account.

Apr 23, 2012 4:19pm EDT  --  Report as abuse
breezinthru wrote:

A tip of my hat and a thanks to Reuters for uncovering this story. Democracies and free markets rely on the press for the free exchange of information and ideas.

Thanks for shining a light on questionable business practices.

Apr 23, 2012 4:55pm EDT  --  Report as abuse
Harry079 wrote:

“Chesapeake”

Insert Enron or Tyco here.

Apr 23, 2012 5:17pm EDT  --  Report as abuse
libertadormg wrote:

Mr. McClendon certainly is is well paid. That unique perk for 2 1/2% ORRI is a real “sweetheart” deal. I wonder how much that purchase right alone is worth? Owning the mere right to own a 2 1/2% working interest in all Chesapeake wells at cost is worth hundreds of millions, perhaps billions of dollars? And to think, just a key to the executive bath room used to be called a perk.

Apr 23, 2012 5:46pm EDT  --  Report as abuse
Pullum wrote:

Does this differ substantially from Wal-Mart payments to Mexican officials ? It sounds corrupt.

Apr 23, 2012 11:10pm EDT  --  Report as abuse
AlkalineState wrote:

Pullum, Walmart’s payments to Mexican officials were at least a legitimate business expense to expand business operations and advance the company. The officials there are the culpable party for taking the bribes. They should be dealt with locally for demanding tribute from Walmart in the first place. But McClendon is just flat out stealing from the shareholders to enrich himself. So yes, it is different from an investment standpoint.

Apr 23, 2012 11:56pm EDT  --  Report as abuse
rissey wrote:

McClendon is head of a PONZI scheme that enables his risk free, no own capital down, investment scheme on selected well heads. The scheme generates CDOs that are monetized at a time of his choosing and he cannot lose. The Board of Directors, are idiots, and they should pay for his paydays. In the same swipe, call in the FBI – he is not different from Madoff, Corzine, Key Lay(Enron),Dennis Kozlowski(Tyco) et.el
This whole argument of CEO talent, CEO’s incentives to align shareholder’s and company’s interest has lost its relevance. Shareholders must regain control of the companies they own.

Apr 24, 2012 4:38am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.