Breaking News from CNBC's Kate Kelly: McClendon Replacement Search is Far Along
WHEN: Today, Wednesday, January 30th
WHERE: CNBC's "Squawk on the Street"
Following is the unofficial transcript of breaking news from CNBC's Kate Kelly. All references must be sourced to CNBC.
KATE KELLY: WELCOME BACK. I'M KATE KELLY WITH SOME BREAKING NEWS ON CHESAPEAKE ENERGY. I'M TOLD THAT THE SEARCH FOR A SUCCESSOR TO AUBREY MCCLENDON, WHO ANNOUNCED HIS RETIREMENT LAST NIGHT, IS WELL UNDER WAY. THE BOARD OF THE COMPANY IS LOOKING AT BOTH INTERNAL AND EXTERNAL CANDIDATES AND IT IS POSSIBLE THEY WILL HAVE A SUCCESSOR TO CURRENT CEO AUBREY MCCLENDON BEFORE HIS SCHEDULED RETIREMENT DATE OF APRIL 1ST. I ALSO HAVE SOME DETAILS ON MCCLENDON'S LIKELY COMPENSATION AS HE LEAVES THE COMPANY AND I'M TOLD THAT IT WILL LIKELY BE A TERMINATION WITHOUT CAUSE. UNDER THOSE CIRCUMSTANCES, ACCORDING TO CHESAPEAKE FILINGS, HE'S ENTITLED TO ROUGHLY 45 MILLION DOLLARS IN TOTAL COMPENSATION. BREAKING THAT DOWN – THAT'S ABOUT A MILLION DOLLAR BASE SALARY FOR FOUR YEARS. IT'S ALSO A 1.95 MILLION DOLLAR BONUS FOR THAT FOUR YEARS, IT'S ABOUT 1.5 MILLION SHARES OF STOCK WHICH WILL VEST IMMEDIATELY UPON HIS TERMINATION. ESTIMATED AT 20 DOLLARS PER SHARE THAT FIGURE MAY CHANGE DEPENDING ON THE MARKET CONDITIONS. AND THEN FRACTIONAL JET USE AND OTHER PERKS THAT COME TO ROUGHLY TWO MILLION DOLLARS FOR THE LIFE OF THIS CONTRACT, YOU GET TO ABOUT 45 MILLION DOLLARS. THAT'S A PRETTY HANDY SUM FOR SOMEBODY WHO IS LEAVING PARTLY BECAUSE DIRECTORS WERE CONCERNED ABOUT WHAT I'M TOLD WAS SOMETHING OF AN AUBREY DISCOUNT IN THE STOCK. THE IDEA THAT INVESTORS WERE NO LONGER HAPPY WITH HIS LEADERSHIP. AT THE SAME TIME, THIS IS COMPENSATION THAT HE EARNED AND AMASSED DURING HIS TENURE AT THE COMPANY UP UNTIL NOW I'M TOLD. SO THAT IS SOMETHING TO KEEP IN MIND AS WELL, MELISSA. SO STILL A BIG HEADLINE FIGURE, BUT I GUESS PERHAPS NOT AS MUCH AS HE COULD HAVE MADE IF HE HAD STAYED ON. HE WAS GETTING VERY ATTRACTIVE BONUSES AND STOCK AWARDS FOR A NUMBER OF YEARS.
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