Chesapeake Details New Chairman's Pay

Archie Dunham, the new independent chairman of Chesapeake Energy's board of directors, will receive about $800,000 in compensation in his first year on the job, most of that in the form of company stock.

In a federal filing Wednesday afternoon, Chesapeake detailed the compensation for Dunham, as well as, for the other members of the company's reconstituted board.  Last week, Dunham, the former chairman of ConocoPhillips, took on that same role at Chesapeake, replacing Aubrey McClendon.  McClendon remains Chesapeake's President and CEO.

At the same time, four other directors were replaced with independent directors.  Bob Alexander, Brad Martin, and Frederic Poses, were all selected by Southeastern Asset Management, Chesapeake's largest shareholder, while Vincent Intrieri was selected by Carl Icahn, the company's second-largest shareholder.

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The company says the new directors will get the same deal that the outgoing directors -- Frank Keating, Don Nickles, Kathleen Eisbrenner, and Richard Davidson -- were receiving.  In May, Chesapeake amended its compensation plan for directors so that all non-employee board members were getting the same $350,000 pay package -- $100,000 in cash and $250,000 in stock.

But, according to the SEC filing, chairman Dunham will earn significantly more. In addition to the basic $350,000 package, which he also gets, the 73-year-old Dunham will receive $500,000 in stock his first year, and then $250,000 more every year after.

Board members get reimbursed for travel related to their director responsibilities, but may no longer use Chesapeake's fractionally owned airplanes.

The release also clarified that, although OSU President Burns Hargis tendered his resignation following the June 8 annual meeting, the Board was not obligated to accept it, and, in fact, did not accept it.

Hargis is currently head of the Board's audit committee, which is in the middle of an investigation into some questionable McClendon loans.  The statement says the Board will reconsider the resignation once the review is complete.