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Change-of-Control Bonuses Widespread at Chesapeake (Reuters)

Natural gas company promises to pay many mid-level workers if it changes hands.

Chesapeake Energy, the Oklahoma City-based natural gas producer that is embroiled in a corporate governance scandal, promises an unusually large number of its employees a payment if the company changes hands, according to Reuters. About 1,600 Chesapeake employees, or almost 12% of the company’s workforce, are eligible for change-of-control bonuses. Chesapeake could end up paying such employees from $100 million to $140 million if it changed hands.

The Chesapeake employees would be paid bonuses just because of the change of control, and not because a change of control resulted in their losing their jobs. Most Fortune 500 companies use a double trigger, that is, employees must lose their jobs as a result of the change of control in order to be paid a bonus.

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