Working in Chesapeake Energy Corporation (NYSE:CHK) extends one the best working experiences, doesn’t it? Apart from receiving a good paycheck, employees at the energy behemoth get the opportunity to enjoy some of the most incredible benefits. Need Botox injections, or tickets to one of the most important matches in the NBA? Join Chesapeake’s work force.
One benefit that has however failed to appear in its external documents, is the ‘special payment arrangement’ guaranteed to 1600 workers in the event that the company changes hands. The existence of this special bracket of workers came to light after Reuters show reviewed some of Chesapeake’s internal documents.
These 1600 employees, who are mainly mid level workers, are obligated to payments between $140 and $100 million in cash, in case the control of the company changes hands. This said, I presume the recent board shakeup really had these workers, who represent 12% of the work force, glued to the edge of their seats.
Interestingly, the 1600 workers are nothing close to top executive. They are the regular lab technicians, title attorneys, and high ranking security officers. The strangest thing about this special payment arrangement is the fact that the 1600 workers are still entitled to ‘change of hands’ payments, even if they choose to retain their jobs at Chesapeake. Examinations by Reuters suggests that this could be Christmas come early for some employees, noting that for a number of employees it will mean 50% of the most recent annual bonus and 50% of the salary.
Conclusive and comprehensive details of the ‘change of control’ payments are still in the dark. Notwithstanding, this peerless perk has caught analysts by surprise. The analysts remarked that the percentage of employees eligible to the perk was unusually high.
As the case would be, the one big question that loomed was whether the change in control provisions had already been implemented at the wake of the June board shakeup. Michael Kehs, the company spokesperson, however, noted that the payments had not been done.
In general, this move is primarily geared towards making Chesapeake Energy Corporation (NYSE:CHK) more attractive than it already is. It needs more skilled labor to assist in the frictionless flow of activities in its Oklahoma City plant.
As experts like to put it, most fortune 100 companies are typical of using a ‘double trigger’. In other words, employees have to lose their jobs before any payments can be processed. Therefore hopes of a change in control offsetting the windfall-single trigger- remain dim.