Chesapeake awards CEO $75 mln, lowers stock mandate

HOUSTON, Jan 7 (Reuters) - Chesapeake Energy Corp's (CHK.N) board of directors awarded a $75 million incentive payment to chief executive Aubrey McClendon and lowered the number of company shares he is required to own, according to a regulatory filing on Wednesday.

The change will allow McClendon time to rebuild his stake after a margin call forced him to sell more than 31 million shares in October, the filing with the U.S. Securities and Exchange Commission said.

The $75 million is to offset drilling costs in oil and gas wells he jointly owns with the company.

The board made the award for his "extraordinary contribution to the joint venture transactions that were consummated by the company during 2008 and increased the company's intrinsic value by at least $10 billion," the filing said.

Chesapeake struck a number of acreage deals last year that helped the heavily leveraged company shore up its cash position. For example in November, Norway's StatoilHydro (STL.OL) said it would pay more than $3 billion for a stake in some of Chesapeake's shale gas assets.

Even so, Chesapeake's shares fell nearly 60 percent in 2008, underperforming an 35 percent drop in the American Stock Exchange index of natural gas companies .XNG.

Under the amended employment agreement, McClendon is required to hold stock with an aggregate value greater than 200 percent of his compensation in 2009 and 500 percent in 2010, according to the agreement.

McClendon's prior employment contract called for minimum stock ownership of 500 percent of his base salary and cash bonus.

McClendon will receive $975,000 in salary in 2009 and is eligible for a cash bonus not to exceed the $1.95 million he received in 2008. In 2008, his base salary was $975,000.