THE SKY'S THE LIMIT - Chesapeake Energy CEO Raking In $24 Million

(06/16/2007)

While Chesapeake Energy went on the rampage about a Roane County jury awarding $405 million to West Virginia royalty holders who contended they had been cheated by the company, the amount seems somewhat innocuous after looking at the mega-millions the company earned and the salary of their head officer.

Aubrey McClendon, Chesapeake's CEO, earned at least $24.2 million last year.

According to an AP report, he was also one of the big gainers from exercising stock options - $102 million.

Such a salary seems to empower McClendon to rail against royalty owners, citing federal law and rights of gas producers to dip into the 1/8 royalty historically held by many West Virginians.

McClendon threatened to stop the construction of Chesapeake's headquarters in Charleston and cease doing business in West Virginia, if the state doesn't quit treating the company so badly.

CEO's wages are now exceeding the pay of Hollywood movie stars and USA athletes, reaching stratoscopic levels with few investor complaints.

A report by the Congressional Research Service says that CEOs make, on average, 179 times as much as the rank-and-file workers, doubling since 1994.

Exxon-Mobil's former CEO was making about $40 million, as gas prices skyrocketed.

If the minimum wage had risen at the same rate as CEO pay since 1990, the minimum wage would be $22.61 today.

The federal minimum wage will increase to $5.85 in July, the first increase in a decade.

Chesapeake Energy is playing hard-ball after a Roane County jury awarded $405 million against natural gas corporations in favor of royalty owners who claim they were cheated. Scott Rotruck said "Chesapeake's decision about building our eastern headquarters (in Charleston) is on hold until we fully understand the ultimate result and ramifications of the jury verdict in Roane County on Saturday night." A Roane jury found Columbia Natural Resources shortchanged the landowners by $134.3 million and said the company should pay $271 million more in punitive damages. Chesapeake bought Columbia Natural Resources in 2005 for $2.2 billion. In January 2006 Gov. Joe Manchin announced that Chesapeake would make Charleston its Eastern Division headquarters, and the company purchased 27 acres at NorthGate Business Park for the headquarters. Rotruck said "Nobody could imagine an award so high, it's almost like capital punishment for a parking violation," but the royalty owners believe they have been scammed. The company has about 400 employees in the Appalachian Basin, including about 300 in Charleston. About 110 employees occupy all or parts of eight floors and a total of about 80,000 square feet in City Center West


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