Chesapeake Energy Corp. is slashing compensation for its board members by about 20 percent amid lingering questions about its corporate governance, the company announced Friday afternoon.
The Oklahoma City-based oil and natural gas company also is eliminating the program that allowed board members to use planes partially owned by Chesapeake for personal travel.
The action was taken after the board consulted with an independent compensation adviser, according to a news release. It reduces board compensation, which had been in excess of $500,000 per member, to a level at or below the average for Chesapeake’s peers.
Chesapeake’s eight outside directors will receive total compensation of $350,000 each year.
“Over the past year, the Board has been undertaking a review of, and implementing changes to, the company’s compensation programs,” said Merrill A. “Pete” Miller Jr., Chesapeake’s lead independent director. “We believe these latest changes to the directors’ compensation will address concerns raised by shareholders and better align Chesapeake with its peers.”
The board also reported the search for an independent chairman by its nominating and corporate governance committee is progressing.
The committee, which consists of board members Don Nickles and Louis A. Simpson, is considering potential candidates with no previous ties to Chesapeake.
Chesapeake co-founder Aubrey McClendon will relinquish his position as chairman on a replacement is identified, the board announced May 1. McClendon will remain as CEO.