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10 Highest Paid CEOs for 2008: Unbelievable

Here's where I stand: if they are truly "overcompensated", then the shareholders would hold the BOD's responsible. The BOD's are voted on by the shareholders and elected by a majority. Now, am I not correct in saying that a majority of shareholders VOTED FOR the BOD? So, that would say that the BOD has the approval of a majority of the shareholders. SO, if what they did is SOOOOOO bad, I would envision the BOD getting voted out next election. But that isn't going to happen because a MAJORITY OF SHAREHOLDERS AGREE WITH THEIR ACTIONS! And this is a majority rule situation. Heck, I can't stand the actions being taken by Obama, but he was elected by a majority.

10 Highest Paid CEOs for 2008: Unbelievable

ubuy2w: were you happy when Aubrey ran the stock up from $3 to $70? Would you be happy with a run from $3 to $21? Cuz that's basically what it did. Running from $3 to $70 to $21 is the exact same thing as running from $3 to $21, if you are a long term investor. The commodity market gave them to extreme run to $70 and took it back to $21. When your product drops in price from $13 to $3, your stock price has to drop accordingly.

BTW, without Aubrey there is no CHK. It would be long gone.

10 Highest Paid CEOs for 2008: Unbelievable

You are so out to lunch. McClendon brokered deals for CHK that netted over $10 billion at a peak in the market. These deals sealed the prosperity for CHK stockholders for years to come. You, and many others, have one big problem: you look at stock price over months or a year. The way to judge a company and a CEO is not to look at the stock price over the last 12 months. That's typical MBA grad school crap! Look at it over the next five years. Has the companies assets been set up to succeed? In CHK's case, they are a dominate player in the U.S. natural gas industry, they hold huge acreage positions in all of the big growth plays, and given Aubrey's unbelievable deals in 2008, they have 3 companies that will be paying much of the capital for drilling over the next 1-2 years.

Why has CHK's stock price fallen? Quite simply, look at a chart of natural gas prices. Do you see ANYTHING there?? Like a drop from $13 to #3?? Hello! Anyone in there? Of course the stock price of a natural gas company is going to go down when the price of their product crashes like that. When nat gas was $13, CHK was selling at $70. Now that nat gas is at $3, simple math would tell you CHK could be as low as $16-17. Well its higher than that. The CEO of CHK doesn't control the price of the commodity.

Quit looking at stock performance over 3 months or 12 months. Start thinking long term and then start looking at the fundamentals of a company. Look at CHK's acreage under lease, their proven and unproven resources, their positions in 3 of the hottest natural resource plays going, their technical advantages to identify these plays well in advance of others, their ability to take acreage they purchased at $500/acre and then turn for over $20,000 per acre, while still retaining over 50% of the interests, and to get the buyer to carry their drilling costs for a year or so. Come on, didn't they teach you anything in grad school other than how to read a stock chart and a financial statement?

Fast Money Recap - 6 Companies That Make Real Things (3/6/09)

Agree with APB up to a point. I disagree that CHK and others have drilled "far beyond any realistic demand requirements". Now, they have drilled beyond demand, but I'd argue that its not really that far. We consume somewhere between 55 and 60 BCF/day in the US. Most estimates of oversupply these days lie in the 2.5 to 4 BCF/day range. Not sure I'd call that "far beyond any realistic demand". It does show that our markets are very volatile and susceptible to big price swings when demand/supply is nudged just a bit. And that saw will cut both ways when the situation flips.

We have dropped 30-40% of the rigs drilling in the U.S. and new wells are plummeting. Also, some companies are shutting in production. This will quickly (late 2009?) bring balance to the situation. Unfortunately, we won't stay balanced for long and will end up with a shortfall again and higher prices again. Then, we'll do the same all over again, with crashing prices and rising prices.

LNG imports are a problem, though. Oversupply of very low incremental cost LNG (think $0.90 to $2.00 per mmBTU) could flood the US market in late 2009 to early 2010 if world markets don't recover. But if world markets don't recover by then, we'll have plenty of other problems to worry about!!