DOW JONES NEWSWIRES
Chesapeake Energy Corp. (CHK) said it decided to trim compensation for outside directors by 20% and eliminates the use of fractionally owned aircraft for personal travel by outside directors.
Under the natural gas producer's new plan, effective immediately, outside directors will receive annual pay of $350,000, comprised of $100,000 in cash and $250,000 in equity. The company said the reduction puts its pay package at or below the average director compensation of its peers.
The change was taken with the aid of an independent compensation adviser as part of a broader review of the company's executive compensation programs. The board has made a handful of compensation changes, including reducing Chief Executive Aubrey McClendon's pay for 2011 and retaining an independent compensation adviser for the board's compensation committee.
The board also said the search for a new non-executive chairman is progressing. Chesapeake's directors have forced McClendon to step down as chairman, bowing to pressure from shareholders over his personal financial dealings and the stock's poor performance.
McClendon agreed to give up the chairmanship and end 18 months early a controversial perk that allows him to purchase a 2.5% stake in every well Chesapeake drills.
Earlier this month, Chesapeake confirmed that the Securities and Exchange Commission had opened an informal investigation focused on the company and McClendon. Also this month, the company said it narrowed its first-quarter losses amid lower derivatives losses.
Shares closed Friday at $14.36 and were down 2 cents after hours. The stock is down 36% so far this year.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; firstname.lastname@example.org