Tuesday, April 28, 2009

Say (What) On Pay?

Directors of Chesapeake Energy have managed to thumb their noses at investor dissatisfaction over outrageous executive pay packages by ponying up $112 million to its CEO, which included a bonus equal to more than 75 times the CEO's base pay and $33 million in stock awards. Please note that the stock price declined during the measurement period; imagine the bonus if the stock price had risen!

Just to make sure that investors got a finger in both eyes, the board also did business with some CEO-affiliated companies and bought the CEO's collection of maps and artwork for $12 million.

So for all the talk about proxy access and "say on pay," some boards manage to remain tone deaf to their fiduciary duties and to any kind of business common sense.

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