Chesapeake Shareholders, Unite!
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
“Above anything else, I hate to lose.” –Jackie Robinson
The level to which I hate losing is clearly being tested, but I am here for a few reasons, the least of which is declaring my phenomenal pain threshold. As I have stated in previous, poetic posts, I am a voracious reader, so you can only begin to attempt to quantify the amount of intense discomfort felt when I read about Chesapeake Energy (NYSE: CHK), CEO, Aubrey McClendon in this recent article from a Forbes contributor, “Chesapeake Energy: CEO McClendon Serves Himself First”.
On the bright side, the article brings up a potential scenario, mentioning the “say-on-pay" vote by Citigroup (NYSE: C), shareholders in their annual meeting, where voters expressed their exhaustion with executive compensation by resoundingly rejecting the salary package for CEO Vikram Pandit. The company faces some serious scrutiny in dealing with this delightful development for shareholders, either ignoring the vote, which would hopefully bring about a PR maelstrom, or revising the pay package as delicately as something seen in “The Hurt Locker”.
Either way, I get to watch from the comfortable seating section of those not invested with Citigroup; unfortunately, I cannot sit in that same section with regards to the recent situation made public regarding Chesapeake. On several occasions I have made mention of my long position with the Oklahoma City oil and gas outfit, even proclaiming policy measures to wean this great nation off foreign oil and into cleaner burning, domestic natural gas (“Natural Gas Pains”, “Natural Gas Pickups Picking up Steam”).
The problem this recent act of executive narcissism poses will most certainly involve some investigative probing, the least of which will deflate share price (as much as a 10% decline, intraday, 4/18/12), as well as having several sage stock social media gurus pontificating as to whether the company survives longer than others in similar leaky boats (Best Buy, First Solar, Research In Motion).
So for those of you that may have taken any sort of interest in Chesapeake, in terms of time, or money, I sincerely apologize for any precious loss with regards to either. Had I known the level of financial chicanery that has recently been reported, I assure you, I would have mentioned them as an example of the type of company to avoid, not one to take any sort of look at for a potential investment.
If you are a shareholder in the company, as I have been for a long time, I want you to affix a target to the date, May 1st, on your calendars, with a bright red Sharpie. This is the scheduled date for the company’s next earnings call, and I have already posted my shopping list on Twitter, just for fun.
As shareholders, we have a right to know just what, exactly, is going on at the companies with which we invest our hard-earned dollars. But we also have voting rights (unless you own shares from a Google stock split), and if we continue the example boldly blazed by Citigroup’s shareholders, we can send a monumental message to every executive that uses investor capital as their personal cookie jars.
The Motley Fool owns shares of Citigroup Inc. kmet312 owns shares of Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.