WASHINGTON, DC – “Chesapeake Energy paid only $13 million in federal income taxes in 2011, after reporting $2.8 billion in U.S. pre-tax profits.28 According to Bloomberg, the firm’s effective tax rate over the course of its 23-year-history has averaged only about 1 percent.
“Chesapeake and other U.S. oil and gas producers benefit from a ‘drilling-costs tax benefit’ that allows generous income tax deferrals. This tax rule may have made some sense a century ago when drilling involved high risks. But today’s technology has enormously reduced the drilling risk of coming up dry.
“Archaic tax rules have helped subsidize outrageous rewards for billionaire Chesapeake CEO Aubrey McClendon, all over and above the more than $1 billion in shady personal loans the CEO has received from the firm’s corporate lenders. SEC and IRS investigations into the dark recesses of Chesapeake’s compensation history with McClendon are now ongoing.
Shareholders are speaking out as well. At Chesapeake’s most recent annual meeting, 80percent of shareholder votes went against McClendon’s $17.9 million pay package for 2011.”
— Sarah Anderson, Chuck Collins, Scott Klinger, Sam Pizzigati, Institute for Policy Studies