McClendon Took Chesapeake Pay 15 Months After Firing

Ex-Chesapeake CEO McClendon Dies in Car Crash
  • One-time king of U.S. gas was deposed by activists in 2013
  • McClendon sought to rebuild shale kingdom on three continents

The late shale entrepreneur Aubrey McClendon was paid by Chesapeake Energy Corp. for more than a year after he was fired by the natural gas giant.

McClendon, who died in a car crash a day after being charged with bid rigging, parted ways in 2013 with Chesapeake, the shale gas explorer he co-founded and led for almost a quarter century. Upon his 2013 termination amid an investor revolt, his employment agreement entitled him to 33 installments of $112,500, followed by a lump sum payment of $7.2 million in July 2014, according to public filings by Chesapeake.

McClendon’s arrangement also entitled him to Chesapeake’s life insurance, medical plan and reimbursement for membership dues and travel expenses. The company disclosed a $69 million cost in association with McClendon’s exit in its annual report for 2014, including $7 million for use of company aircraft. A Chesapeake spokesman declined to comment.

Car Collision

During the course of his career, the 56-year-old Oklahoma City native convinced investors to bet billions on U.S. shale fields that the supermajor oil explorers shunned. McClendon died when his sport-utility vehicle collided with a concrete embankment and burst into flames along an Oklahoma City expressway. The vehicle burned before rescuers could pull McClendon from the vehicle, police said.

“Aubrey McClendon was one of the brightest men I’ve ever dealt with,” billionaire activist investor Carl Icahn said in a tweet on March 2. “I am saddened to have heard the news.”

After founding Chesapeake in 1989 with 10 employees and $50,000, McClendon and partner Tom Ward built the Oklahoma City-based company into the largest supplier of U.S. gas, a mantle the company retained until Exxon Mobil Corp. unseated it in 2010.

Deposed from Chesapeake in a bitter, prolonged shareholder revolt led by Icahn in 2013, McClendon wasted no time unveiling his second act: He invited engineers, landmen and geologists to defect from Chesapeake and come join his new company, American Energy Partners, just blocks away.

(Company corrects duration of post-termination pay in first, second paragraphs.)
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