Chesapeake Energy Corp’s board of directors will take a 20 percent pay cut and will no longer use the company’s private jet, according to a company announcement Friday.
The board voted to cut its own pay and limit its access to the jet after consulting with an “independent compensation adviser,” according to the company statement.
Criticism has intensified in recent weeks related to Chesapeake’s management, particularly related to performance and use of resources amid mounting debt and a cash shortage. The company’s stock was up 6 percent Friday, closing at $14.36, but has experienced a tumultuous two weeks, with its current market value at $9.5 billion, down from $10.3 billion when markets closed on Monday.
The nation’s second-largest natural gas producer after Exxon Mobil Corp. faces is saddled with about $13 billion in long-term debt and its earnings have been cut because of the lowest natural gas prices in a decade.
Chesapeake plans to sell up to $11.5 billion in assets to fund its operations for the remainder of the year and cut down its debt to about $9 billion, the company has said. Critics say the company should reduce its operational spending, instead of pushing to expand its production capabilities during a time of high debt and low earnings.
“Under the new board compensation arrangement, which is effective immediately, outside directors will receive total annual compensation of $350,000, comprised of a $100,000 cash component and a $250,000 equity component,” the company announcement said. “This reduces director compensation to a level at or below the average director compensation of the company’s peers.”