Chesapeake Energy

[UNC12345 + 171]

Is this an acceptable move in these times?  Is Senior management raiding the cupboard before filing chapter 11?  Just wanted to hear from the knowledge base here.  

On Friday, Chesapeake Energy said that it had revised its compensation structure and performance metrics after deciding, together with advisors, that they would “not be effective in motivating and incentivizing the Company’s workforce.” 

Chesapeake pre-paid 21 senior executives and named executive officers a total of $25 million, for which they waived their participation in the company’s 2020 annual bonus plan and waived their rights to all equity compensation awards with respect to 2020.    

 

[cbrasher1 + 272]

https://www.rigzone.com/news/chesapeake_energy_files_for_chapter_11-29-jun-2020-162567-article/?utm_source=GLOBAL_ENG&utm_medium=SM_FB&utm_campaign=FANS

[Ward Smith + 6,615]

On 5/11/2020 at 8:37 AM, UNC12345 said:

Is this an acceptable move in these times?  Is Senior management raiding the cupboard before filing chapter 11?  Just wanted to hear from the knowledge base here.  

On Friday, Chesapeake Energy said that it had revised its compensation structure and performance metrics after deciding, together with advisors, that they would “not be effective in motivating and incentivizing the Company’s workforce.” 

Chesapeake pre-paid 21 senior executives and named executive officers a total of $25 million, for which they waived their participation in the company’s 2020 annual bonus plan and waived their rights to all equity compensation awards with respect to 2020.    

 

From your link

"The target variable compensation of certain senior employees, including our named executive officers and designated vice presidents, will be prepaid with an obligation to refund up to 100% of the compensation (on an after-tax basis) if certain conditions are not satisfied. The total amount paid to these 21 employees will be approximately $25 million. Our named executive officers’ target compensation will be earned 50% based on their continued employment for a period of up to 12 months and 50% based on achieving certain specified incentive metrics."

So they took a 50% haircut, then are on the hook to repay even that if they can't deliver. Is this common? I've never seen it. One could, and should say the blame for this is on the executives, but they've been in trouble since before Aubrey died. How many years is that? 

Edited June 29, 2020 by Ward Smith