Why is CW that managers and advisers should not put their own money where their mouth is?
Mr. McClendon did not specifically address the loans from EIG Energy Partners. But he was certainly making no apologies for the long-standing program—approved by shareholders in 2005—allowing him to personally invest in wells. He says the arrangement had been favored by Chesapeake’s board since 1993 because directors wanted him to “eat his own cooking.” If he had to put his own money on the line, he’d take great care in selecting the most promising drilling projects.
“American business would be run better today if there was more alignment between CEOs’ interest and the company,” says the 52-year-old Oklahoman. “For example, would the financial crisis of 2008 have occurred if the CEO of Lehman and Morgan Stanley and Goldman and Citibank had to take a very small percentage of every mortgage-backed security . . . or every loan they made?”