A shareholder lawsuit has revealed that Chesapeake Energy's cost for personal jet travel of top executives and directors totaled nearly $14 million over the past five years. The suit claims that was understated by as much as $10 million a year, largely because of the lack of inclusion of fixed costs, but any details may be included in the redacted portions. The company owns fractional shares in 22 different jets, according to Federal Aviation Administration records, including a high-end Gulftstream G-550, eight other Gulfstreams and 13 Cessna aircraft. That is a large number given the size of Chesapeake, but comparisons are difficult because FAA records don't show the company's percentage ownership in each plane.
Even before the lawsuit, Chesapeake was viewed as unusually generous with its fleet of jets, which are operated by NetJets Inc. The company requires CEO Aubrey McClendon to fly on its aircraft for both personal and business travel for efficiency and security reasons. Other top executives also are permitted extensive personal usage, while outside directors are allowed 40 hours of personal aircraft travel a year.
Last year, Chesapeake disclosed it spent $2.9 million in personal travel for executives and board members. (WSJ, 5/8/2012)
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