A very fancy accountant…

May 2, 2006

Chesapeake Energy (CHK), which has generated a truckload of headlines over the past 24 hours because of the record earnings it reported yesterday — in a nutshell it beat expectations by 8 cents a share — disclosed some interesting things in the proxy it filed late Friday. For example, Chairman and CEO Aubrey McClendon received $459K in personal accounting services, which brings the company’s total spending on this particular perk — whatever it is — up to over $900K over the past three years. Though we’re not exactly sure what "personal accounting services" are or why the company’s investors are paying for it, it’s hard to believe that any one individual’s finances are that complicated that they’d need to have the equivalent of a CFO working full-time on personal business. Indeed, the $459K is not too far off what Chesapeake paid CFO Marcus Rowland last year. And he was responsible for a whole company’s finances.

Of course, that’s not the only interesting thing buried in Chesapeake’s proxy. There’s a complex related-party transaction called  the "founder well participation program" that was approved at last year’s annual meeting and which allows McClendon and co-founder Tom Ward to "continue participating as working interest owners" and is administered by the company’s compensation committee. Though I don’t understand all of the details of how the program works, the company noted that both McClendon and Ward each paid the company a whopping $72.4 million to participate. Presumably, they each received something greater in return.

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