Shareholders in Chesapeake Energy Corp have shown their displeasure with the way the company has been run, by refusing to back the re-election of two board members. The two board members in question, V. Burns Hargis, the president of Oklahoma State university and Richard Davidson, the former CEO of Union Pacific, both offered their resignations after receiving a little over 25% of the shareholder votes.
Shareholders also soundly defeated a non-binding vote on an executive officer compensation scheme, with just voting 20% in favour.
The criticism of the company’s leadership, especially CEO Aubrey McClendon continues to be scathing; David Dreman, the chairman of Dreman Value Management, which owns approximately 1000 000 Chesapeake shares was quoted as saying, “When you see all the things that Aubrey McClendon has done in the past years in increasing numbers, I don’t think that - as talented as he is – he should be a member of Chesapeake anymore … I wouldn’t buy any more stock at this point.”
McClendon has already announced that he plans to step down from the position of chairman next month, and that the company is to replace four of its board members with candidates selected by leading shareholders. The names of the new board members are expected to be announced on 22nd June.
As well as the turmoil caused by revelations of the irregular (though not necessarily illegal) financial activities that Aubrey McClendon appears to have been engaged in, shareholder confidence has been hit hard by a nearly US$ 10 billion funding shortfall for 2012.
Edited from various sources by David Bizley
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/11062012/chesapeake_board_encounters_shareholder_displeasure/