Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)

Posted: 7 May 2012

See all articles by Paul M. Healy

Paul M. Healy

Harvard Business School; National Bureau of Economic Research (NBER)

Clayton S. Rose

Harvard University - Business School (HBS)

Aldo Sesia

Harvard Business School

Date Written: March 28, 2012

Abstract

Aubrey McClendon, founder and CEO of Chesapeake Energy, was, according to Fortune Magazine, the highest paid U.S. CEO in 2008 receiving over $100 million in total compensation. McClendon received this compensation despite a significant drop in the company's stock price and financial performance during the year. The (A) case addresses the specifics of the compensation and the rationale for the compensation from the perspective of Chesapeake's board and its compensation committee including McClendon's role in consummating several joint ventures, which the board and committee believed positioned the company for future growth in the relatively young industry of unconventional natural gas exploration and extraction. In addition, the (A) case describes the role of the compensation committee and the company's executive performance measurement factors.

Learning Objective: Examine the role of boards in executive compensation.

Suggested Citation

Healy, Paul M. and Rose, Clayton S. and Sesia, Aldo, Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) (March 28, 2012). Harvard Business School Accounting & Management Unit Case No. 110-047, Available at SSRN: https://ssrn.com/abstract=2053337

Paul M. Healy (Contact Author)

Harvard Business School ( email )

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National Bureau of Economic Research (NBER)

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Clayton S. Rose

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
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Boston, MA 02163
United States

Aldo Sesia

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-496-2085 (Phone)

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