Chesapeake Energy Corporation (NYSE:CHK) continued to pay former CEO Aubrey McClendon for more than 12 months after he was fired.
This week McClendon died in a car crash, just one day after he was formally charged with bid rigging by the United States Department of Justice. McClendon left shale gas explorer Chesapeake in 2013, writes Joe Carroll for Bloomberg.
Former Chesapeake CEO dies in Oklahoma City car crash
McClendon co-founded the company before leading it for nearly 25 years. He was fired in 2013 after an investor revolt but his severance package included 33 installments of $112,500 and a payment of $7.2 million in July 2014.
Public filings from Chesapeake show that the former CEO was also entitled to company life insurance, medical plan and reimbursement for membership dues and travel expenses. McClendon’s departure cost the company $69 million, according to its 2014 annual report. A Chesapeake spokesman declined to comment on the matter.
The 56-year-old Oklahoma City native died in a car crash after his sport utility vehicle smashed into a concrete embankment and caught fire on an expressway in his hometown. He was well known for convincing investors to pile into U.S. shale fields that other oil explorers had rejected. Police said that the vehicle burned before rescue teams could pull McClendon out of the car.
“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.”
Chesapeake started with just 10 employees and $50,000 before McClendon and partner Tom Ward built the company into the biggest supplier of natural gas in the U.S. The company held that particular title until 2010 until it was dethroned by Exxon Mobil Corp.
Carl Icahn led the shareholder revolt that provoked McClendon’s deposition in 2013. However the former CEO wasted no time in poaching engineers, landmen and geologists to join his new company American Energy Partners, whose offices were just a few blocks away from Chesapeake headquarters.
When the Department of Justice revealed that it had formally indicted McClendon on federal charges, the company announced that it was confident it would not face any punishment.