Chesapeake Energy Corporation appointed Archie W. Dunham, former Chairman of ConocoPhillips, as its Independent Non-Executive Chairman. Aubrey K. McClendon, former Chairman and CEO, who was caught up in a storm created by his Founder Well Participation Program earlier, resigned from the position of Chairman but remains the CEO of the company.
The Board also appointed four new independent directors. Three of them, Bob G. Alexander, R. Brad Martin and Frederic M. Poses, were proposed by Southeastern Asset Management (SAM), the largest shareholder with a 13.9 percent ownership stake. The fourth director, Vincent J. Intrieri, was proposed by Carl C. Icahn, Chesapeake’s second largest shareholder with a 7.6 percent stake. Here is what Chesapeake’s press release said:
These five new directors replace Richard K. Davidson, Kathleen M. Eisbrenner, Frank Keating and Don Nickles who have resigned and Charles T. Maxwell who retired at the annual meeting on June 8, 2012. Following the annual meeting, Mr. Davidson and V. Burns Hargis submitted their resignations when they did not receive support of a majority of the shares voted. The Board accepted Mr. Davidson’s resignation, but given Mr. Hargis’ current role as Chairman of the Audit Committee, and reflecting input from SAM and Mr. Icahn, the Board has declined to accept his resignation, at this time, to permit completion of the previously announced review of the financing arrangements between Mr. McClendon (and the entities through which he participates in the Founder Well Participation Program) and any third party that has had or may have a relationship with the company in any capacity. Mr. Hargis will continue to lead the review, but is not expected to remain Chairman of the Audit Committee. Upon completion of the review, the Board will revisit his resignation.
The other directors remaining on the Chesapeake Board are Mr. McClendon, Louis A. Simpson, who was proposed by SAM in 2011 and will now become Chairman of the Nominating and Governance Committee, and Merrill A. (“Pete”) Miller who was serving as Lead Independent Director. With the appointment of an independent Non-Executive Chairman, the role of Lead Independent Director has been eliminated and Mr. Miller will become Chairman of the Compensation Committee. Final Board Committee assignments will be made by the reconstituted Board. As previously announced, the Board will also take the necessary actions to enable shareholders to elect the entire Board of Directors at the 2013 annual meeting of shareholders.
Carl Icahn has around 50 million shares in Chesapeake whereas Mason Hawkins had nearly 87 million shares at the end of September. Robert Pohly and billionaire Ken Griffin also have shares in CHK but their positions are worth less than $100 million.