The Advisors' Blog

– Broc Romanek, CompensationStandards.com

Here’s news about this lawsuit culled from this Reuters article:

Chesapeake Energy Corp CEO Aubrey McClendon plans to reimburse the company $12 million it paid to purchase his antique map collection in 2008 as part of a settlement with shareholders angered by the transaction. The preliminary settlement, filed in Oklahoma state court on Tuesday, also places restrictions on senior management’s right to hold company stock in a margin account or make speculative trades with Chesapeake shares. The settlement requires court approval, after which ownership of the maps will revert back to McClendon.

McClendon, who founded the company and is one of the industry’s most visible proponents of natural gas, was forced to sell 94 percent of his Chesapeake shares in 2008, amounting to 6 percent of the company’s outstanding stock, to meet margin calls. That same year, the company’s board awarded a $75 million bonus to McClendon in a year when its stock fell 60 percent. The sale of his map collection to the company in 2008 also netted McClendon a $4 million profit. Influential proxy advisory service ISS this year opposed McClendon’s reelection to the company’s board, citing unresponsiveness to investors and compensation issues.

At this year’s annual meeting in June, more than 40 percent of the company’s shareholders rejected Chesapeake’s executive pay plan, and McClendon was reelected with 78 percent of the vote. Before the settlement, Chesapeake had already taken some steps in respect to its governance practices. It hired a compensation consultant and a lead independent director this year.