The Oklahoma City-based oil and gas producer has settled a shareholder lawsuit over excessive pay and Mr. McClendon has agreed to buy back an antique map collection he sold to the company for $12.1 million. Other perks, including a one-time $75 million retention payment, will remain in place.
As part of a negotiated settlement with several public pension funds and filed in Oklahoma state court on Tuesday, Chesapeake agreed make or retain several corporate governance and compensation changes that experts say will bring the company into the mainstream of U.S. corporate practices.
The measures include: hiring an independent compensation consultant to "review and make recommendations" on executive compensation; putting to shareholder vote a provision requiring members of the board of director receive a majority of votes casts at the annual shareholder meeting; and prohibiting executives putting company stock in a margin account, using it for hedging or trading in puts or calls with it.
The company has faced shareholder discontent ever since it disclosed it was buying the collection of maps and giving Mr. McClendon a retention bonus after a year in which Chesapeake's stock dropped by almost 60%. At one point during that tumultuous period on Wall Street, in which oil and gas prices dropped sharply, Chesapeake's stock fell so low that Mr. McClendon was forced to sell 94% of his shares to satisfy margin calls.