While the media has been marveling at the chutzpah of Chesapeake Energy (NYSE: CHK) CEO Aubrey McClendon and his daring (dastardly?) deeds that have kept the company stuck in the market's penalty box (at least until recently), there may be an even bigger problem at Chesapeake: its 401(k) plan.

According to retirement plan information provider Brightscope, a massive 48% of the assets in Chesapeake's 401(k) plan are in Chesapeake stock. Unlike the gamblin' ways of McClendon, this doesn't pose a threat to the company itself, but it does create a huge amount of risk for the company's employees and their hopes of a comfortable retirement.

I don't like the way Chesapeake has been managed, particularly in recent years. But that's of little consequence here. The bottom line is that whether we're talking Chesapeake or any other company, having an outsized chunk of 401(k) funds in company stock is asking for trouble.

An alarmist would bring up Enron and the bludgeoning its employees' retirement accounts took when the company's stock collapsed. And, really, a lot should have been learned from that. But it's not just about Enron -- or Chesapeake, for that matter. According to Brightscope, a full 50% of Coca-Cola's (NYSE: KO) 401(k) is invested in company stock. Sherwin-Williams (NYSE: SHW) has 56% of its plan assets in company stock, while 41% of General Electric's (NYSE: GE) near-$20 billion 401(k) plan is in GE stock.

While this heavy concentration in Chesapeake stock may have seemed like a great idea for employees in the past, it's been a nightmare over the past five years.


CHK data provided by YCharts.

Over that stretch, Chesapeake workers would have done far better by simply being invested in an index fund that matched the S&P 500 (INDEX: ^GSPC) index.

But the performance of Chesapeake's stock -- or Coke's, Sherwin-Williams', or GE's, for that matter -- is beside the point. The bottom line is that you already have huge financial exposure to your employer because it pays your monthly paycheck. Amplifying that by loading your retirement portfolio full of company stock is a terrible idea.